Oil eases but heads for small weekly gain as investors focus on Middle East supply
USO•Oil prices fell on Friday but were heading for weekly gains, with Brent up 0.4% and WTI up 5.6% so far this week. Supply risks around the Strait of Hormuz and a large US crude stock draw supported prices, while the IEA’s diesel release weighed on European diesel margins.
1. Oil prices and weekly gains
Brent crude futures fell 78 cents, or 0.74%, to $105.14 a barrel, while US West Texas Intermediate crude futures fell 99 cents, or 1%, to $96.98. For the week so far, Brent was up 0.4% and WTI had gained 5.6%. WTI rose more than 3% on Thursday after US crude stocks fell following hurricane-related production shut-ins.
2. Supply risks and diesel
Attacks around the Strait of Hormuz over the past 10 days have heightened supply concerns. Iran said it was stepping up strikes in response to a US blockade of its ports and tougher sanctions introduced last month. The International Energy Agency agreed to release more than 20 million barrels of diesel, and European diesel refining margins fell nearly 2% on Friday to $78.67 a barrel.
3. Sanctions discussions
The Trump administration is considering lifting sanctions on some shadow-fleet vessels carrying oil and petroleum products from Russia, Iran and Venezuela, a US official said. The discussions followed a temporary lifting of sanctions on Russian diesel fuel.
