Oil prices declined on Friday after advancing in the previous session, with markets assessing signs of recovering Middle East supply alongside the possibility of further escalation in the U.S.-Iran conflict.
At 06:35 GMT, December Brent crude futures were down 0.7% at $101.61 per barrel, while West Texas Intermediate crude futures fell 0.8% to $92.17 per barrel.
Brent and WTI had gained more than $4 and $2 per barrel, respectively, during Thursday’s session.
Thursday’s increase followed a Wall Street Journal report that Washington was considering deploying another aircraft carrier group and additional military personnel to the Middle East. The report brought renewed attention to the potential implications of further military activity for regional energy supplies.
The Strait of Hormuz remains a key consideration for oil markets because of its role in global energy shipments. Any disruption to tanker movements or regional infrastructure could affect supply flows, although the supplied information does not indicate that such a disruption has occurred.
Saudi Arabia Resumes Pipeline Operations and Yanbu Loadings
Saudi Arabia has restarted its East-West Pipeline and resumed tanker loadings from the Red Sea port of Yanbu following earlier disruptions, according to the supplied information.
The resumption has helped restore some regional export flows, providing a counterweight to concerns about potential supply interruptions elsewhere in the Middle East.
Separately, reports indicated that Chinese refiners have suspended fuel exports beyond Hong Kong and Macau during October.
The measure could reduce the availability of refined products on international markets, including diesel, jet fuel and petrol. Diesel markets have also been affected by lower Russian exports and uncertainty surrounding possible restrictions on U.S. fuel shipments.
The United States has reportedly encouraged European countries to consider releasing emergency diesel reserves as governments monitor fuel supplies, refinery production and inventories.
Oil Markets Monitor Demand and Inflation Outlook
Signs of recovering Middle East supply and uncertainty over global demand have limited further increases in crude prices following the recent rally, according to the supplied information.
Energy prices are also being monitored for their potential impact on inflation and central bank policy.
If crude prices remain elevated for an extended period, they could contribute to inflationary pressures and become a consideration for central banks including the U.S. Federal Reserve. Any monetary-policy impact would depend on the duration and magnitude of the price increase alongside broader economic conditions.
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