Oil prices were trading slightly lower during Asian deals on Friday, with both major benchmarks on track to end the week above $100 a barrel for the first time since mid-May, as increasing attacks along key shipping routes in the Middle East fuelled fears of a prolonged disruption to supplies.
By 3:40 pm AEST (5:40 am GMT), Brent crude futures were down 63 cents or 0.6% at US$107.00 a barrel, while U.S. West Texas Intermediate crude lost 56 cents or 0.6% to US$101.92 a barrel.
Both benchmarks rose more than 6% on Thursday.
ING commodities strategists commented in 'The Commodities Feed':
"Oil’s resilience reflects a market now repricing both the duration and severity of the conflict, along with a clearer recognition of the mounting threat to regional supply.
"And while meaningful volumes are still moving through the Strait of Hormuz, flows remain well below pre-war levels, underscoring how fragile the situation has become.
"Saudi energy infrastructure and crude oil exports from the Red Sea are increasingly at risk, with the Houthis in Yemen targeting Saudi Arabia.
"As the Houthis have taken control of the Red Sea port of Mokha in Yemen, recent events increase the threat to shipping around the Bab al-Mandeb Strait."
Meanwhile, U.S. President Donald Trump has not shown any signs of easing attacks on Iran. He warned the U.S. may hit Iran's Pickaxe Mountain near its heavily damaged Natanz uranium enrichment facility, but said he thought the war would end immediately after the November midterm elections.
Iran said it had attacked 10 ships near the Strait of Hormuz on Wednesday, after the U.S. hit five Iranian oil tankers.
Iran's Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.
Among data releases, commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased by 0.4 million barrels to 424.1 million barrels, matching the five-year average, according to data from the Energy Information Administration (EIA).
Markets were expecting a draw of 1.6 million barrels.
