Oil prices posted their second weekly decline on Friday as supply concerns eased, after US President Donald Trump signalled that he is not keen to restart the Iran war. But further attacks on ships in the region kept prices remain volatile.
Brent, the benchmark for two thirds of the world's oil, was virtually flat at $95.84 a barrel. West Texas Intermediate, the gauge that tracks US crude, settled 0.2 per cent lower at $88.56 a barrel. Both Brent and WTI declined 2.5 per cent for the week, after plunging about 13 per cent last week.
Mr Trump this week indicated that he is not planning to resume the war with Iran after his Republican Party suffered heavy losses in the midterm elections. He also said on Thursday that the US was no longer looking to reach an agreement with Tehran.
“We don’t need a deal with Iran. Those days have long since passed. We’ve got their money, hundreds of billions of dollars, and we’ve got their strait,” Mr Trump said in a post on Truth Social.
But attacks continue on ships crossing the Strait of Hormuz, the global chokepoint for two thirds of global crude supply and liquefied natural gas, putting upward pressure on oil prices amid supply risks.
This week, Iran's Islamic Revolutionary Guard Corps claimed there were explosions on two supertankers carrying more than four million barrels of oil in the strait.
A tanker was also struck by a projectile while travelling east in the Arabian Gulf, with casualties reported, the UK Maritime Trade Operations agency said yesterday.
Attacks on Saudi energy infrastructure by Yemen's Houthis also pushing prices higher. Houthi spokesman Yahya Saree said that a pumping station on the kingdom's East-West oil pipeline and the Yanbu oil installation on the Red Sea coast were hit on Thursday.
Saudi Arabia has been exporting much of its crude through the pipeline since the beginning of the war, owing to disruption in the strait.
The International Energy Agency, on the other hand, said in its monthly report on Friday that the global oil market was set to return to a surplus for the first time since the start of the Iran war, despite supplies remaining tight.
Global oil supplies outpaced demand for the first time since the conflict broke out in late February, with crude inventories rising by 1.7 million barrels per day in October as exports from the Gulf recovered faster than worldwide demand, the Paris-based IEA said.
Gold, meanwhile, pulled back from gains to close lower and post its worst week in four months, as markets increasingly expect the US Federal Reserve to raise interest rates in December.
The precious metal, which on Thursday slid to a one-year low, shed about 0.1 per cent to $3,878.55 an ounce. Silver retreated 2.73 per cent to $48.75 an ounce.
