Oil Heads for Second Weekly Loss as Trump Keeps the Iran Blockade in Place

Brent crude futures were down 1 cent at $95.41 a barrel at 0242 GMT, and US West Texas Intermediate fell 20 cents, or 0.25%, to $88.52, according to Reuters. Reuters said Brent was heading for a 2.4% weekly fall and WTI for 2.5%. In the previous week, Brent plunged 16% and WTI 13%. Reports differ on the size of that earlier drop: The National, which had Brent at $95.59 shortly before 9am UAE time, put Brent's fall the previous week at about 13%.

The question for Gulf exporters and the airlines, shippers and manufacturers that buy their fuel is whether the market now treats the conflict as contained. Prices have stopped swinging as hard as they did earlier in the month, but the supply risks that pushed them up have not gone away.

Trump wrote on Truth Social that a deal with Iran was no longer needed. "We don't need a deal with Iran. Those days have long since passed," he said, according to The National. Reuters read the remarks as a sign that he will keep the blockade on Iranian oil shipments and trade, along with economic sanctions. The National reported that he has also signalled he does not intend to resume hostilities, after his Republican Party suffered heavy losses in the US midterm elections.

US demand data added to the pressure. Crude inventories rose by 4.7 million barrels to 414.4 million barrels in the week ended November 6, the Energy Information Administration said on Thursday. Analysts in a Reuters poll had expected a draw of 1.1 million barrels. The agency attributed the build to weaker demand for refined products and a jump in imports.

"I think the oil market is priced to perfection at this point," said Chris Brankin, global advisor at the Melbourne brokerage MiTrade. He added that prices had recovered somewhat but that traders, who are watching every development in the Middle East, were not buying with much conviction.

The security picture has not improved. Iran's military said four oil tankers were hit by explosions in the Strait of Hormuz on Thursday after ignoring warnings, a claim Reuters said it could not immediately verify. The UK Maritime Trade Operations agency reported that a tanker travelling east in the Gulf was struck by a projectile, with casualties reported, The National said. Yemen's Houthis said they hit a pumping station on Saudi Arabia's East-West pipeline, an oil facility at the Red Sea port of Yanbu and an Aramco building in Riyadh. Since the war began, Saudi Arabia has sent much of its crude through that pipeline to avoid the strait.

An Emirates NBD senior economist quoted by The National said earlier strikes on shipping had "tempered hopes of a diplomatic resolution". According to the economist, renewed Iranian attacks lifted Brent 1.4% to $92.76 a barrel on Wednesday.

Elsewhere in commodities, spot gold rose 1% to $3,917.70 an ounce on Friday morning after falling to a more than one-year low in the previous session. The National said gold had dropped below $4,000 because markets now expect the US Federal Reserve to raise interest rates in December.