Oil prices were mixed on Friday, but set for their second weekly decline, as the US plans to continue its Iranian blockade, reducing the chance of renewed large-scale fighting that could disrupt Middle East supplies, though attacks on shipping remain a danger.
At 0242 GMT on Friday, Brent futures were ‌little changed, down 1 cent at $95.41 a barrel, while West Texas Intermediate (WTI) declined by 20 cents, or 0.25%, to $88.52 a barrel. These declines reversed two days of gains during a volatile week. Earlier hopes for a rapprochement in the US-Israel war against Iran, which is now in its ninth month, were offset by strikes on Saudi Arabian infrastructure by Yemen’s Houthis and attacks on tankers transporting crude out of the Gulf.
The weekly outlook shows Brent set for a 2.4% drop following a 16% plunge the previous week, while WTI is set for a 2.5% decline after dropping 13% previously. Prices slipped on Friday after US President Donald Trump said on Truth Social that a deal with Iran was not necessary to end the war, indicating he will stick with the blockade on oil shipments and trade and economic sanctions.
Chris Brankin, global advisor for Melbourne-based brokerage MiTrade, said the overall decline in prices over the past two weeks reflects a good assessment of the risks to the market. Brankin said, "I think the oil market is priced to perfection ‌at this point," and added that prices have bounced back a bit but without much conviction on the part of traders, which shows they are following closely what is happening in the Middle East.
Risks to oil shipments out of the Strait of Hormuz, the key waterway for crude exports from the main Middle East producers, remain despite the easing prices. On Thursday, Iran's military said four oil tankers were hit by explosions in the Strait of Hormuz after ignoring warnings. Reuters could not immediately verify the Iranian accounts. That same day, Yemen's Houthis said they had attacked a pumping station on the Saudi East-West oil pipeline; an oil facility in the Saudi Red Sea city of Yanbu; and an Aramco building in the capital Riyadh.
Also pressuring prices, US crude and fuel inventories rose last week, driven by softer refined products demand and a jump in oil imports, the Energy Information Administration said on Thursday. Crude inventories rose by 4.7 million barrels to 414.4 million barrels in the week ended November 6, the EIA said, compared with analysts' expectations in a Reuters poll for a 1.1 million-barrel draw.
