Oil prices eased on Friday but were heading for weekly gains. Uncertainty over Middle East supplies and a larger-than-expected draw from US crude stockpiles supported the market.
West Texas Intermediate crude futures fell 49 cents, or 0.50%, to $97.48 by 0623 GMT on Friday. Brent crude futures dropped 50 cents, or 0.47%, to $105.42 a barrel in the same period.
Despite Friday's dip, WTI jumped 5.91% this week so far, while Brent increased 0.49%. WTI had settled up more than 3% on Thursday after a big US crude stock draw on hurricane production shut-ins.
Hormuz attacks keep supply risk in focus
ING analysts wrote that uncertainty in the Middle East and concerns over the sustainability of oil flows through the Strait of Hormuz have the market pricing in a significant risk premium. They added that some kind of agreement between the US and Iran was required to give the market more confidence that stronger oil flows from the region would continue.
Attacks around the Strait of Hormuz surged over the past 10 days, with Iran saying it was stepping up strikes in response to the US blockade of its ports and tougher sanctions introduced last month. Ship tracking firm Kpler said total Hormuz clearance averaged 11.62 million barrels per day over the seven days to October 13, about 68% of the 17.15 million bpd baseline.
Kpler analysts expected a slower and more uneven Hormuz recovery in the absence of a comprehensive political deal.
Policy moves try to cool prices
The International Energy Agency agreed on Thursday to release over 20 million barrels of diesel to the market, along with any oil remaining from a record release of emergency reserves pledged in March. Haitong Futures said oil prices rose overnight in a sign that investors were dissatisfied with these measures.
Separately, a US official said on Wednesday that the Trump administration is considering lifting sanctions on some so-called shadow fleet vessels that have carried oil and petroleum products from countries such as Russia, Iran and Venezuela. The aim is to cut record global freight rates.
Source: Reuters via Investing.com
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