Global oil prices edged lower on Friday, October 16, but both major benchmarks remained in positive territory for the week. The market is being influenced by concerns over possible supply disruptions from the Middle East and a significant decline in U.S. oil inventories, Reuters reports.
Brent crude futures fell by 71 cents, or 0.67%, to $105.21 per barrel. U.S. WTI lost 77 cents, or 0.79%, to trade at $97.20 per barrel.
Despite the daily decline, Brent gained 0.44% for the week, while WTI rose by 5.81%. The previous day, U.S. crude climbed by more than 3% following a sharp drop in inventories, attributed to production shutdowns caused by a hurricane.
Supply risks through the Strait of Hormuz
An additional factor for the market remains the situation around the Strait of Hormuz, a key oil shipping route. Over the past ten days, attacks in the area have increased sharply.
Iran said it was stepping up its strikes in response to the United States’ blockade of its ports and tighter sanctions.
ING analysts note that uncertainty in the Middle East and supply risks through the Strait of Hormuz are forcing the market to price in a significant risk premium. In their view, an agreement between the United States and Iran is needed to restore confidence in the stability of supplies.
“The escalation of Iranian attacks has led to a sharp reduction in oil supplies from the Persian Gulf.”
Kpler experts
The risk of further supply disruptions remains one of the key factors supporting high oil prices.
At the beginning of October, freight rates for exports of Russian oil to India rose to new record highs amid increasing risks in the Black Sea and rising prices on the global tanker market.
