Oil prices fell on Friday as Middle East supply concerns eased after US President Donald Trump said it will not attack Iran before US elections next month amid productive talks to end their war that has disrupted global energy markets.
Brent crude futures fell $1.37, or 1.3%, to $102.91 a barrel by 0450 GMT. US West Texas Intermediate (WTI) crude futures fell $1.09, or 1.2%, to $90.40.
On a weekly basis, Brent prices are set for weekly gains after settling 4% higher on Thursday, while WTI is set for a slight decline.
On Thursday, Trump said Washington was having “productive discussions” with Iran and said no attack was planned before the November 3 midterm congressional elections after media reports that he was considering an attack before then.
Iran’s Tasnim news agency reported the same day that Foreign Minister Abbas Araqchi said Tehran is reviewing the US response to its proposal that would reopen the Strait of Hormuz within seven days.
“The prospect of easing tensions still needs to be reinforced by concrete progress in negotiations and improvements in shipping safety through the Strait of Hormuz,” said XS.com analyst Linh Tran.
The US is still pressuring Iran economically to try to end the war, now in its eighth month, imposing sanctions on Thursday targeting individuals, networks and 17 vessels for transporting Iranian crude, oil products and petrochemicals.
Prices have been volatile this week as threats to shipping in the Gulf and the Strait of Hormuz, which carried shipments equal to about 20% of global oil and fuel before the war, have increased in October.
China, the world’s top oil importer, is set to resume refined fuel exports after a brief halt during its Golden Week holiday, a move that will help ease tight global diesel, gasoline and jet fuel markets, Reuters reported on Friday, citing sources.
This week, the International Energy Agency agreed to accelerate the release of oil stocks and to prioritise diesel supplies under a plan launched in March.
The oil market is also contending with Hurricane Isaias in the Gulf of Mexico. Because of the storm, producers there have shut in about 1.3 million barrels per day, or 62.9%, of current oil production as of Thursday, according to the US Marine Minerals Administration.
“This disruption provides additional support for oil prices, but the duration of its impact will depend on post-storm facility inspections and the pace of operational recovery,” Tran said.
