(RTTNews) – Oil prices traded lower on Friday but headed for a sharp weekly gain amid escalating U.S.-Iran tensions and concerns over prolonged disruption to global energy supplies.
Brent crude futures tumbled 2.7 percent to $104.68 a barrel but were still on track for their biggest weekly advance since July. WTI crude futures were down 2 percent at $100.44 a barrel.
In its latest monthly report, the International Energy Agency (IEA) predicted that world oil demand will drop by 2.5 million bpd this year, more than its previous forecast of a 1.6 million bpd decline due to record fuel prices. The IEA sees world oil supply declining by 5.7 million bpd this year.
Investors were also reacting to media reports suggesting that Iran and Oman were meeting with Gulf states to reopen shipping through the Strait of Hormuz.
The Financial Times reported that Gulf foreign ministers plan to meet their Iranian counterpart in the Omani coastal city of Salalah this coming Monday to secure a deal to manage commercial shipping through Hormuz.
Overnight, the Israeli military demolished key tunnels built by the Iran-backed Hezbollah group beneath the strategic Ali al-Taher ridge in southern Lebanon.
Elsewhere, media reports suggest that Yemen’s Houthis seized a key Red Sea Island in the middle of the Bab al-Mandab strait, completing a push to take control of a waterway crucial to Saudi oil exports.
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