Mubasher: Oil prices extended their rally on Friday from the previous session after attacks on two oil carriers near the strategic Strait of Hormuz, which raised fears of lower crude supplies, Reuters reported.
However by 8:41 am GMT, US Nymex crude futures declined by 0.46% to $52.04 per barrel (pb), while global benchmark Brent futures went down by 0.28% to $61.14 pb.
Both contracts settled at 2.2% on Thursday, after surging as much as 4.5% against the backdrop of a tanker attack in the Gulf of Oman, capping a slump in prices in recent weeks on the back of worries about global demand.
However, Nymex was heading to post a weekly drop of 3.2%, while Brent was on track the fourth week of losses, with an around 3% decline.
The attack on oil vessels was the second incident in one of the world’s major shipping routes in a month, amid a heightened tension between the US and Iran.
Washington hastened to blame Tehran for the attacks which were denied by Iran.
The Iranian mission to the UN stated that it “categorically rejects the US unfounded claim with regard to 13 June oil tanker incidents and condemns it in the strongest possible terms.”
“The events in the Gulf would now appear to have taken on an overt military dimension and we are waiting to see what action the US Fifth Fleet and other military resources in the region may take,” energy and security consultancy Mathyos Advisory founder Tom O’Sullivan was quoted by Reuters.
Tensions in the Middle East have escalated since US President Donald Trump withdrew from a 2015 multinational nuclear accord with Iran and re-instated sanctions, targeting the oil-rich nation’s hydrocarbon industry.
On the demand front, the Organization of the Petroleum Exporting Countries (OPEC) on Thursday slashed its projection for global oil consumption, with an expected growth of 1.14 million barrels per day (bpd), citing trade disputes and hinting the risk of a further step-down in the second half of this year.
The producer club are set to meet with its allies, including Russia, later this month or early next to decide whether to keep their supply restraints in place.
