Oil set for sharp weekly drop, but Middle East supply concerns provide floor
USO•USO•USO•USO•Brent crude is set to fall 12% this week and WTI 12.1%, despite both contracts rising for a second day on renewed concern about Middle East supply flows. Tanker attacks in the Gulf and Strait of Hormuz have helped prices rebound after expectations of de-escalation drove an earlier selloff.
Brent crude futures rose $1.57, or 1.6%, to $99.86 a barrel on Friday, while U.S. West Texas Intermediate gained $1.10, or 1.22%, to $91.62. Both contracts climbed for a second day, but were on track for weekly losses of 12% and 12.1%, respectively.
Oil prices fell 8% on Wednesday after Democrats swept the midterm elections, as traders anticipated a possible de-escalation of the US-Israeli war against Iran, now in its ninth month. Prices rebounded after tanker attacks in the Gulf and Strait of Hormuz renewed concerns about regional supply flows. ANZ strategist Daniel Hynes said flows through the strait were under 60% of capacity, while Iran said three more tankers had been attacked on Thursday.
