Oil prices surge amid Gaza ceasefire talks complications and tensions in West Asia

Global oil prices experienced a notable uptick on Friday, poised to conclude the week with a modest increase, as ceasefire talks in Gaza faced complications following the deaths of over 100 Palestinians awaiting aid delivery.

Brent futures for April delivery climbed by 29 cents, reaching $82.20 a barrel, while US West Texas Intermediate (WTI) rose 22 cents to $78.48.

WTI is anticipated to see a 4 per cent weekly surge, with Brent maintaining proximity to last week's settlement price.

Despite West Asia conflict's limited impact on crude flows, concerns surrounding the situation continue to influence the energy market.

President Joe Biden expressed concern over reports of Israeli troops firing on people awaiting food aid in Gaza, stating that the incident could complicate ceasefire talks. Israel, in response, attributed the deaths to crowds around the aid trucks, suggesting victims were trampled or run over.

Even before this incident, talks between Israel and Hamas in Qatar displayed a gap, with no breakthrough reported by Qatari mediators.

The unresolved issues further complicate the negotiation of a 40-day truce in the Gaza war.

In addition to West Asia tensions, China's manufacturing activity faced challenges in February, contracting for the fifth consecutive month according to an official factory survey.

This downturn in manufacturing adds pressure on Chinese policymakers to consider additional stimulus measures.

Meanwhile, the US Federal Reserve's preferred inflation gauge, the US personal consumption expenditures (PCE) index, showed January inflation aligning with economists' expectations, keeping the possibility of a June interest rate cut on the table.

On the supply side, a recent Reuters survey revealed that the Organisation of the Petroleum Exporting Countries (OPEC) increased its daily output to 26.42 million barrels in February, a 90,000 bpd rise from January.

Libyan output also surged by 150,000 bpd month-on-month. Looking ahead, a survey of 40 economists and analysts predicts an average oil price of $81.13 per barrel for the front-month contract throughout the year, indicating expectations for continued market volatility and potential disruptions.

(With inputs from Reuters)