Oil prices were on track to rise for the third straight week, with investors on edge as the week-old war between Israel and Iran showed no signs of either side backing down.
Brent crude futures fell $1.57 cents, or 2 per cent, to $77.28 a barrel. On a weekly basis, it was up 3.9 per cent.
The US West Texas Intermediate crude for July – which did not settle on Thursday as it was a US holiday and expires on Friday – was up 86 cents, or 1.1 per cent, to $76. The more liquid WTI for August rose 0.7 per cent, or 50 cents to $74.
Prices jumped almost 3 per cent on Thursday as Israel bombed nuclear targets in Iran, and Iran fired missiles and drones at Israel after hitting an Israeli hospital overnight.
“Oil prices remain high due to doubled tanker rates and ships avoiding the Strait of Hormuz,” said Phil Flynn, analyst at The Price Futures Group.
“The risk to supply is keeping them on edge while there have been no major disruptions of Iranian exports,” Flynn said.
Iran is the third-largest producer among members of the Organisation of the Petroleum Exporting Countries, extracting about 3.3 million barrels per day (bpd)of crude oil.
About 18 million to 21 million bpd of oil and oil products move through the Strait of Hormuz along Iran’s southern coast, and there is widespread concern the fighting could disrupt trade flows in a blow to supplies.
There was no sign of an exit strategy from either side, as Israeli Prime Minister Benjamin Netanyahu said Tehran’s “tyrants” would pay the “full price” and Iran warned against a “third party” joining the attacks.
The White House said on Thursday that President Donald Trump will decide whether the US will get involved in the Israel-Iran conflict in the next two weeks.
“The “two-week deadline” is a tactic Trump has used in other key decisions. Often these deadlines expire without concrete action,.. which would see the crude oil price remain elevated and potentially build on recent gains,” said Tony Sycamore, analyst at IG.
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