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Oil prices eased on Friday following a rally, but are still on track for a second consecutive weekly gain as investors assess the aftermath of hurricane damage in the U.S. and the potential impact of Israeli attacks on Iranian oil sites.
Brent futures dipped by 0.5% to $79.01 a barrel, while U.S. West Texas Intermediate crude futures fell by 0.4% to $75.53 per barrel.
Despite the daily fluctuations, both benchmarks are expected to record a 1%-2% gain for the week.
The recent Hurricane Milton’s impact on the U.S. economy and fuel demand is a major factor influencing market sentiment. Additionally, concerns about potential Israeli retaliation against Iranian oil facilities are keeping prices near the 200-day average levels.
Following Iran’s missile attacks on Israel earlier this month, tensions have escalated in the region. Israeli Defence Minister Yoav Gallant has warned of a strong response to any aggression from Iran, further adding to the geopolitical uncertainties.
Meanwhile, Gulf states are urging Washington to prevent Israeli strikes on Iran’s oil sites, fearing repercussions on their own oil facilities in case of an escalation in the conflict.
On the supply side, Libya’s National Oil Corporation has successfully restored production levels close to pre-crisis figures, reaching 1.22 million barrels per day.
In conclusion, the combination of hurricane-related disruptions, geopolitical tensions in the Middle East, and supply dynamics in key oil-producing regions are contributing to the volatility in oil prices. Investors should closely monitor these factors to make informed decisions about their investments and financial strategies.