Oil prices fell during Friday's trading session, the last trading of the week, as crude continued the wave of losses that began in the middle of the week.
Prices are heading to record a sharp weekly decline in light of expectations that the Iran war will subside after the electoral losses suffered by the party of US President Donald Trump, but concerns about Middle East supplies have prevented further decline.
On Friday, Brent crude prices fell in spot trading by 1.22 percent to reach $96.93 per barrel, by 09:38 GMT. US West Texas Intermediate crude prices also fell 1.4 percent to $89.29 per barrel.
Brent crude oil is set to decline by 12 percent this week after the December contract expires on October 30, while the West Texas Intermediate crude contract is expected to decline by 12.1 percent this week.
The two contracts recorded a sharp decline earlier this week against the backdrop of expectations that the congressional elections that took place on Tuesday, and led to the transfer of control of the Senate and House of Representatives from Republicans who support Trump to the Democratic Party, could lead to a calming of the US-Israeli war against Iran, which has now entered its ninth month.
Oil prices fell by 8 percent on Wednesday alone after the Democrats achieved a landslide victory in the midterm elections, and at settlement reached their lowest levels in two months.
Prices rose again against the backdrop of escalating attacks on oil tankers on Wednesday and Thursday in the Gulf and the Strait of Hormuz. Which renewed concerns about supply flows from the region.
Iran said on Thursday that three more oil tankers were attacked in the Strait of Hormuz, and data issued by the British Maritime Trade Operations Authority indicate that attacks on oil tankers are still continuing at a pace close to their highest levels ever.
Several major central banks raised interest rates this week, but they appear to be in widely different stages of the monetary tightening cycle; Some are still in their infancy, while others are approaching their potential end. As monetary policymakers remain cautious about inflationary pressures, the outlook for interest rates will remain dependent, in part, on the course of the conflict in the Middle East and its repercussions on energy markets, which have witnessed a decline since the Democrats’ sweeping victory in the US midterm elections.
The Bank of England raised interest rates for the first time in more than three years on Thursday, while the Reserve Bank of Australia approved the fifth increase during 2026 this week, and it may be the last in the monetary tightening cycle. As for the US Federal Reserve, the European Central Bank, and the Bank of Japan, they kept interest rates unchanged last week, while keeping the door open for additional increases.
Below is the position of central banks in the group of ten developed countries, ranked from highest to lowest key interest rates:
1. Australia
The Reserve Bank of Australia raised the cash rate to 4.85 per cent this week, its highest level in 18 years. But the vote on the resolution was unexpectedly close, and the bank also took a less hawkish tone, indicating that monetary policymakers may be about to end the monetary tightening campaign. Markets do not currently expect additional increases in interest rates.
2. Norway
The Norwegian Central Bank left interest rates unchanged on Thursday, as expected, after raising them twice this year. The bank reiterated that further monetary tightening is still possible to contain inflation, noting that the conflict in the Middle East continues to create a state of uncertainty about price prospects.
3. United States
The Federal Reserve kept interest rates unchanged last week, awaiting more evidence on the path of inflation, which it said remains high. President Donald Trump has repeatedly called for lower interest rates, and accused policymakers of being “hostile” and “partisan” following the September rate increase. Federal Reserve Chairman Kevin Warsh rejected these accusations, stressing the independence of the central bank. Markets are pricing in an 80 percent chance of raising interest rates in December, and expect further monetary tightening in 2027.
4. Britain
The Bank of England raised interest rates for the first time in more than three years on Thursday, bringing the key interest rate to 4 percent. The bank said that at least one more increase would be likely if the conflict in the Middle East continued, and it expected inflation in Britain to rise to about 5 percent in mid-2027. All members of the Monetary Policy Committee voted in favor of raising interest, while one of them supported a larger increase.
5. New Zealand
The Reserve Bank of New Zealand surprised markets last week when it kept the official cash rate at 2.75 percent, in a close vote, rather than passing a third successive increase. Governor Anna Breman said that the chances of a rate hike in December are “high.”
6. Eurozone
The European Central Bank kept interest rates unchanged last week, but warned of rising inflation risks. Data released on Wednesday showed inflation accelerating to its highest level in three years in October. Monetary policymakers are also watching the sharp rise in France's debt risk premium, driven by investor concerns about the size of the country's debt and the uncertainty of its fiscal outlook. European Central Bank President Christine Lagarde also announced her early resignation.
7. Canada
The Bank of Canada raised its key interest rate for the first time in more than three years last week, as expected, but Governor Tiff Macklem said monetary policy was still a bit too easy. The bank increased the interest rate by 25 basis points to 2.5 percent, a level that is still lower than 2.75 percent, which the bank estimates as the neutral level, that is, the one that does not restrict or stimulate economic activity.
8. Sweden
Sweden's Riksbank, which has long been among the major central banks most dovish, raised interest rates for the first time since 2023 on Wednesday, bringing the key interest rate to 2 percent. This move was widely expected, after rising concerns about inflation and declining concerns about growth. Monetary policymakers have hinted at additional increases, although financial markets are not fully pricing in another increase before March 2027.
9. Japan
The Bank of Japan kept interest rates unchanged last week, as expected. The bank announced the achievement of its goal in its ongoing effort for nearly 14 years to reach the target inflation rate, but indicated that it continues to monitor price pressures, which suggests the possibility of approving another increase soon. The bank also raised its inflation expectations slightly, at a time when recent data indicate a widening scope of price pressures.
10. Switzerland
The Swiss National Bank is expected to keep its key interest rate at zero percent in the coming months. The minutes of its meeting in September showed that monetary policymakers saw monetary conditions as appropriate to keep inflation within the target range. Inflation rose in October to its highest levels in nearly three years, but remains under control at 1.5 percent. Low yields should help prevent excessive appreciation of the Swiss franc, although geopolitical tensions have increased demand for safe-haven assets this year.
