In the global commodity market, crude oil prices saw a sharp weekly decline following Israel's counterattacks against Iran while reports disclosed that the US Federal Bank (Fed) will keep interest rates higher for longer.

Also, investors and economic data indicating low demand in the US, the world’s biggest oil consumer, supported the downturn. Oil prices spiralled downward in the last two days after Israel hit Iran in a counterattack that sent negative signals about escalating tensions in the Middle East.

ICE Brent crude price fell by 4.5% to $86.44 per barrel on Friday. Brent price had crossed $90 per barrel on Friday of the previous week.

West Texas Intermediate (WTI), the American benchmark, traded at $82.12 a barrel at the same time on Friday, for a fall of about 4.1% from last Friday’s session that closed at $85.66 per barrel.

Uncertainty regarding the timing of the Fed’s interest rate cuts, combined with Fed officials’ statements, put downward pressure on prices.

New York Fed President John Williams said he does not foresee an urgent need for interest rate cuts and that rate cuts should be determined according to economic activity.

The Federal Reserve wants to see more ‘confidence’ that inflation is moving lower to its 2% target before beginning to cut interest rates, according to minutes of its recent meeting released last week.

Atlanta Fed President Raphael Bostic also declared that inflation will return to the target slower than expected, meaning there is no rush to cut interest rates.

During the Fed’s next two-day meeting, set for May 1, the bank is expected to keep the federal funds rate unchanged.

There is a 23% chance that the Fed will start to reduce interest rates in June, while the percentage increases to 49% for a reduction in July and 71% in September.

According to statistics issued by the Energy Information Administration (EIA) on Wednesday, US commercial crude oil stocks rose by 2.7 million barrels to 460 million barrels last week, exceeding market expectations. The projection was for an increase of 1.6 million barrels.

Additionally, strategic petroleum reserves, which are excluded from commercial crude stocks, increased by about 600,000 barrels to 364.9 million barrels last week, the data revealed.

The larger-than-expected inventory build, showing a fall in US demand appetite, triggered a drop in oil prices.

Meanwhile, tension between Iran and Israel increased following retaliation from Israel, though Iranian authorities downplayed the ensuing response.

Israel carried out an air attack on Iran’s consulate building in Damascus on April 1. On April 13, Iran launched over 300 missiles and drones at Israel.

According to international media reports, Israel attacked Iran in the early hours of Friday morning, when sounds of heavy explosions were heard in at least two Iranian cities.

Iranian authorities, however, downplayed these incidents and said the sound of explosions in the central Iranian city of Isfahan and the northwestern city of Tabriz was the result of Iranian air defense systems firing at ‘suspicious objects,’ state media reported.

Iranian media had announced the sounds of explosions in the northeast of the Isfahan province, which hosts the Iranian Air Force Base. Officials insisted that all military and nuclear facilities located in and around the city of Isfahan were safe and that no damage had been caused.