Crude Oil Prices Ease Despite Middle East Supply Fears, US Stock Draw

By Adedapo Adesanya

Crude oil prices eased early on Friday even as there is uncertainty about Middle East supplies and a larger-than-expected crude ‌stocks draw in the United States, with Brent futures down by 71 cents or 0.67 per cent to $105.21 a barrel, and US West Texas Intermediate (WTI) futures down by 77 cents or 0.79 per cent to $97.20 per barrel.

Analysts said uncertainty in the Middle East and concerns over the sustainability of oil shipments through the Strait of Hormuz have prompted the market to factor in a significant risk premium.

They added that an agreement between the US and Iran would help restore market confidence and provide greater assurance that stronger oil flows from the region can be sustained.

Supply concerns have intensified following a surge in attacks around the Strait of Hormuz over the past 10 days, with Iran saying it was escalating strikes in response to a US blockade of its ports and tougher sanctions imposed last month.

According to ship-tracking firm Kpler, oil flows through the Strait averaged 11.62 million barrels per day in the seven days to October 13, representing about 68 per cent of the baseline level of 17.15 million barrels per day.

Meanwhile, Reuters reported that the Houthis fired missiles at the presidential palace complex in the southern city of Aden on Thursday, killing two guards, while the Saudi-led coalition in Yemen detailed dozens of attacks on Saudi infrastructure in the escalating conflict.

The International Energy Agency (IEA) agreed on Thursday to release over 20 million barrels of diesel to the market and any oil ⁠remaining from a record release of emergency reserves pledged in March to boost supply and cool soaring prices.

The Donald Trump administration is considering easing sanctions on some vessels belonging to the so-called shadow fleet, which transports oil and petroleum products from countries including Russia, Iran and Venezuela.

The move is aimed at reducing global freight rates, which have surged to record highs.

The discussions follow US President Donald Trump’s temporary lifting of sanctions on Russian diesel fuel, a decision that drew criticism from Ukrainian President Volodymyr Zelenskiy, several European countries and some Republicans within President Trump’s party.

US crude oil inventories fell by 8.6 million barrels in the week ended October 9, according to data released by the US Energy Information Administration (EIA) on Thursday.

The decline followed figures from the American Petroleum Institute (API), released a day earlier, which showed that crude stockpiles had dropped by 11.12 million barrels over the same period.