Oil prices dipped on Friday following a surge the day before, but both Brent and West Texas Intermediate (WTI) crude are poised for their second consecutive weekly increase as investors assess the impact of Hurricane Milton on U.S. demand against potential disruptions to supply if Israel conducts strikes on Iranian oil facilities.
By 0430 GMT, Brent crude futures had decreased by 29 cents, or 0.4%, settling at $79.11 per barrel, while WTI crude futures fell by 21 cents, or 0.3%, to $75.64 per barrel. Both benchmarks are on track for a weekly gain of 1% to 2%.
Market strategist Yeap Jun Rong from IG noted that oil prices continue to rise week-on-week, driven by geopolitical tensions. However, concerns about high crude inventories and a potentially gradual easing of U.S. Federal Reserve interest rates have tempered the recent rally.
In the U.S., Hurricane Milton made landfall and caused significant destruction in Florida, resulting in at least 10 fatalities and widespread power outages. This destruction may reduce fuel consumption in the nation, which is the world’s largest oil producer and consumer.
Investors are closely monitoring how the hurricane’s aftermath could affect the U.S. economy and fuel demand, according to Hiroyuki Kikukawa, president of NS Trading, a Nissan Securities unit. He indicated that oil prices are likely to hover around their current 200-day average levels, with the main concern being whether Israel will retaliate against Iranian oil facilities.
The 200-day average for Brent stands at $81.68 a barrel, while for WTI, it is at $77.36.
Earlier this month, crude prices surged after Iran launched over 180 missiles at Israel on October 1, heightening fears of retaliatory actions against Iranian oil sites. Israel has not yet responded, and oil prices have eased somewhat throughout the week.
Israeli Defense Minister Yoav Gallant has warned that any attack on Iran would be “lethal, precise, and surprising.” Iran supports various groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza, and the Houthis in Yemen.
In related developments, Israeli strikes in central Beirut on Thursday night resulted in 22 fatalities and at least 117 injuries, according to Lebanon’s health ministry, with reports indicating that a senior Hezbollah member was targeted in the assaults.
Meanwhile, Gulf states are pressing the U.S. to prevent Israel from striking Iranian oil sites, fearing that their own oil infrastructure could be targeted by Iranian proxies should the conflict escalate, according to three Gulf sources.
Gulf States Urge US to Block Israeli Attack on Iran’s Oil Facilities
Security Forces Foil Attack, Eliminate Militants
On the supply front, Libya’s National Oil Corporation announced on Thursday that it has restored production to near levels seen before a central bank crisis, reaching 1.22 million barrels per day.
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