SINGAPORE: Brent crude prices fell nearly $2 on Friday, giving up gains from the previous session, after the White House signalled it would hold off on deciding whether the US would intervene in the escalating Israel-Iran conflict. Despite the dip, Brent was still on track for a third consecutive weekly gain.
Brent crude futures dropped $1.89, or 2.4 per cent, to $76.96 a barrel by 0255 GMT. On a weekly basis, prices remained up by 3.8 per cent.
Meanwhile, US West Texas Intermediate (WTI) crude for July delivery, which did not settle on Thursday due to the US holiday and is set to expire on Friday, rose 53 cents, or 0.7 per cent, to $75.67. The more actively traded August WTI contract inched up 17 cents to $73.67.
Oil prices had surged nearly 3 per cent on Thursday after Israel reportedly bombed nuclear sites in Iran, prompting retaliatory missile and drone strikes from Tehran, including an overnight attack on an Israeli hospital. The week-old conflict showed no signs of easing, fuelling concerns of wider regional instability.
Brent futures retreated on Friday following comments from the White House press secretary, who said President Donald Trump would make a decision on potential US involvement in the conflict within two weeks.
“Oil prices spiked on fears of deeper US involvement, but the White House indicated that a window for de-escalation still exists,” said Phil Flynn, an analyst at The Price Futures Group.
Iran, the third-largest oil producer in the Organisation of the Petroleum Exporting Countries (OPEC), pumps around 3.3 million barrels of crude per day. Between 18 million and 21 million barrels per day of oil and petroleum products pass through the nearby Strait of Hormuz, a key chokepoint for global supply. Any disruption to this corridor could rattle oil markets further.
“The two-week timeline is a strategy Trump has used in the past,” noted Tony Sycamore, an analyst at IG. “Often, these deadlines lapse without any major action, which could keep oil prices supported or even drive them higher if uncertainty persists.”
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