Before the Bell: Oil Prices Ease as U.S. Signals Increased Crude Supply Amid Middle East Turmoil

Oil prices retreated slightly on Friday following a tense week marked by Middle East conflicts that rattled global energy markets. U.S. and Israeli officials have been working to soothe market concerns over a potential extended campaign in Iran, paving the way for easing crude supply worries.

Futures for major U.S. stock indexes showed modest gains: Dow futures edged up 48 points, S&P 500 futures added 3 points, while Nasdaq 100 futures slipped 14 points early in the session. The previous day's market was dragged down by surging energy costs and renewed inflation fears flagged by the Federal Reserve.

Last week, Israel struck the Iranian section of the South Pars gas field, triggering Iranian retaliatory attacks on energy infrastructure across the region, including significant sites in Qatar. This escalated Brent crude prices past $119 a barrel and sent European natural gas prices higher. Eventually, coordinated efforts by the U.S. and Israel to rule out further attacks on South Pars helped oil prices pull back from peak levels.

The White House hinted at potential moves to ease sanctions on some Iranian oil exports, attempting to alleviate tight energy supply concerns. Meanwhile, central banks across the U.S., Europe, and Asia kept interest rates steady for now, opting to monitor the economic fallout from the ongoing Middle Eastern unrest.

President Donald Trump sought to calm jittery markets, pledging to do "whatever necessary" to resolve the crisis while denying imminent plans for ground troop deployment. The Pentagon has requested $200 billion in war funding, underscoring the financial stakes of the campaign.

The Strait of Hormuz remains a focal point. This narrow waterway, critical for global oil shipments, has been effectively closed due to conflict and threats from Iran against vessels supporting U.S. interests. Shipping firms face rising insurance costs and safety concerns, restricting oil flow and sustaining supply chain bottlenecks.

Despite recent airstrikes on Iranian missile sites near Hormuz by the U.S., some analysts warn that only a land-based intervention or an end to hostilities can fully reopen the vital shipping route. Damage to broader Middle Eastern infrastructure could keep global oil prices elevated well after the fighting subsides.

Brent crude last traded around $109 per barrel, far above the pre-conflict level near $70. Meanwhile, gold prices bounced back after a dip, buoyed by a slight drop in the U.S. dollar, though the metal faced pressure due to central banks signaling no near-term rate cuts amid inflation worries.

In company news, FedEx (NYSE: FDX) raised its full-year earnings forecast thanks to strong holiday demand. The logistics giant noted that while air freight costs and flight rerouting tied to the Iran conflict could hit short-term results, their jet fuel supplies remain unaffected. Shares jumped more than 9% in premarket trading.