Brent crude retreated from $100 a barrel on Friday, falling roughly 4% as reports on US-Iran diplomacy and continued Red Sea oil flows eased immediate supply fears. Momentum indicators flagged an overdue pause after oil’s rapid climb. Traders now weigh whether the global benchmark can hold triple digits.
Brent drops most since June
The global benchmark fell roughly 4% on Friday to settle near $97 a barrel, its biggest one-day drop since late June. Brent for September settlement dropped 3.9% to close at $96.78 a barrel in New York. WTI for September delivery fell 3.1% to settle at $89.31 a barrel.
Selling deepened after Reuters reported that Pakistan is exploring a path toward resuming stalled US-Iran peace talks, while the New York Times said President Donald Trump met with senior advisers to weigh ramping up US military attacks on Iran. Oil’s relative strength index measures the direction of prices. That gauge signaled weakness following a roughly week-long rise.
Red Sea flows keep moving
Crude had reached triple digits the previous session after attacks on tankers in the Red Sea, and traders piled into options in record numbers to hedge against a sudden deescalation. Yet oil kept traversing Middle East routes, with millions of barrels of Saudi crude still shipped from its Red Sea coast despite Houthi militants seeking to blockade the kingdom’s shipping. According to TD Securities’ Bart Melek: “The crude market is taking a breather”.
Supply risks linger
The pullback trimmed July’s over 30% advance for crude. Traders are also contending with what appear to be Ukrainian attacks at the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast, which exports most of Kazakhstan’s oil. The route handles about 2% of global daily crude supply. One source said the country’s biggest field had cut output by more than half.
Trump’s revived levies have meanwhile fed worries over another inflationary spike as global bond yields surge. Retail diesel has topped $5 a gallon in the US and gasoline sits above $4, raising the prospect of demand destruction.
Sources: Rigzone, Investing.com
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