Oil heads for weekly gain with focus on Middle East supply

Oil prices steadied on Friday and were set for a weekly gain, according to Business Recorder, as traders weighed uncertain Middle East supplies and a bigger than expected drop in US crude inventories. By 1107 GMT, Brent futures had risen 36 cents to $106.28 a barrel, while WTI had eased 19 cents to $97.78. Brent is up 1.4% so far this week and WTI has gained 6.4%.

Saxo Bank analyst Ole Hansen said the market is balanced between lasting supply disruption risks in the Middle East and continued ship attacks near the Strait of Hormuz. Attacks in that waterway surged over the past 10 days, with Iran stepping up strikes to answer a US port blockade and tougher sanctions. Separately, the IEA plans to release the remaining 100 million barrels under its March accord, while reports suggest Washington may ease sanctions on some dark fleet tankers.

European diesel refining margins fell almost 2% on Friday to $78.67 a barrel after the IEA agreed to release more diesel. Those margins had climbed to $95 a barrel in September, when conflict in Ukraine and Iran tightened diesel supply. Kpler analysts said Iranian attacks sharply cut Gulf crude flows and expect a slower, more uneven Hormuz recovery without a comprehensive political deal.