Oil eases but heads for weekly gain as investors focus on Middle East supply
USO•Oil prices fell on Friday but were headed for weekly gains, with Brent up 0.72% and WTI up 5.9% so far this week. Supply uncertainty around the Strait of Hormuz and a larger-than-expected draw in US crude stocks supported prices, while diesel margins fell after the IEA agreed to release more than 20 million barrels.
1. Oil prices and weekly moves
Brent crude futures fell 47 cents, or 0.44%, to $105.45 a barrel, while WTI fell 62 cents, or 0.63%, to $97.35. WTI had settled more than 3% higher on Thursday after a large US crude stock draw linked to hurricane-related production shut-ins.
2. Hormuz supply concerns
Attacks around the Strait of Hormuz increased over the past 10 days as Iran said it was stepping up strikes in response to a US blockade of its ports and tougher sanctions. Kpler said Hormuz clearance averaged 11.62 million barrels per day in the seven days to October 13, about 68% of its 17.15 million-barrel-per-day baseline. ING analysts said uncertainty over regional flows had added a significant risk premium to oil prices.
3. Diesel margins decline
European diesel refining margins fell nearly 2% to $78.67 a barrel after the International Energy Agency agreed to release more than 20 million barrels of diesel. The margins had reached as high as $95 a barrel in September as supply tightened because of wars in Ukraine and Iran.
