Oil retreats but heads for weekly climb on potential Mideast supply disruption
Shafaq News/Oil eased on Friday after a rally the previous day, but prices remained set fora second straight weekly gain as investors weighed the impact of hurricanedamage on U.S. demand against any broad supply disruption if Israel attacksIranian oil sites.
Brent crudeoil futures fell 29 cents, or 0.4%, to $79.11 a barrel by 0430 GMT. U.S. WestTexas Intermediate crude futures dropped 21 cents, or 0.3%, to $75.64 perbarrel.
For theweek, both benchmarks were headed for a 1%-2% gain.
"Oilprices continue to extend (their) run week-on-week, with geopolitical risksfuelling the rebound," said Yeap Jun Rong, market strategist at IG. But headded that reservations over high crude inventories and a possibly more gradualeasing of the U.S. Fed rate have put the recent rally on hold.
In theUnited States, Hurricane Milton plowed into the Atlantic Ocean on Thursdayafter cutting a destructive path across Florida, killing at least 10 people andleaving millions without power. The destruction could dampen fuel consumptionin some areas of the world's largest oil producer and consumer.
"Investorsare evaluating how hurricane damage might impact the U.S. economy and fueldemand," said Hiroyuki Kikukawa, president of NS Trading, a unit of NissanSecurities.
"Oilprices are likely to hover around the current 200-day average levels, with theprimary concern being whether Israel will retaliate against Iranian oilfacilities," he said.
The 200-dayaverage for Brent is at $81.68 a barrel and for WTI it's at $77.36.
Crudebenchmarks spiked this month after Iran launched more than 180 missiles againstIsrael on Oct. 1, raising the prospect of retaliation against Iranian oilfacilities. Israel has yet to respond, and crude benchmarks have eased andremained relatively flat through the week.
IsraeliDefence Minister Yoav Gallant, however, has said that any strike against Iranwould be "lethal, precise and surprising".
Iran isbacking several groups fighting Israel, including Hezbollah in Lebanon, Hamasin Gaza and the Houthis in Yemen.
In Lebanon,Israeli strikes on central Beirut on Thursday night killed 22 people andwounded at least 117, Lebanon's health ministry said. Lebanese security sourcessaid at least one senior Hezbollah figure was also targeted in the attacks.
Gulf states,meanwhile, are lobbying Washington to stop Israel from attacking Iran's oilsites, out of concern their own oil facilities could come under fire fromTehran's proxies if the conflict escalates, three Gulf sources told Reuters.
On thesupply side, Libya's National Oil Corporation (NOC) said on Thursday it hasrestored production close to levels before the country's central bank crisis,reaching 1.22 million barrels per day.
(Reuters)
