Oil prices edged lower in early trading on Friday but remained on track for weekly gains as the United States and Iran continued trading strikes, keeping supply risks elevated, according to a Reuters report published by The Hindu Business Line.
Brent futures fell 6 cents, or 0.08%, to $76.24 a barrel by 0125 GMT. U.S. West Texas Intermediate (WTI) crude lost 4 cents, or 0.06%, to $72.04. For the week, Brent was set for a 6% gain and WTI for a 5% increase, according to the report.
West Asia Supply Risks Drive Weekly Gains
The conflict between the United States and Iran escalated anew. Iranian armed forces launched attacks on US military infrastructure in Gulf states on Thursday following US strikes on Iran's southern coastal and eastern provinces, further straining a three-week-old ceasefire, the report stated. Separately, Iranian media reported multiple explosions across southern Iran, including Bushehr, where one of the country's nuclear plants is located. The renewed fighting came the day that Iran buried its slain Supreme Leader Ayatollah Ali Khamenei, the culmination of a week of mass funeral processions and rallies. Khamenei was killed on the first day of the war on February 28.
The conflict has delayed the full reopening of the Strait of Hormuz, a key waterway through which about 20% of daily global oil and gas supplies passed before the war, according to the report.
"Despite the US ramping up attacks on military sites in Iran, the market drew some reassurance from the Trump administration's decision to avoid targeting Iranian energy infrastructure," said Daniel Hynes, senior commodity strategist at ANZ bank, as quoted in the report.
He added that this was aided by comments from U.S. President Donald Trump, who said on Wednesday he did not think the war would restart and that "anything that happens is going to be over very quickly."
Demand-Side Pressures: Inflation and China Data
Concerns that accelerating inflation could soften oil demand weighed on the market and pressured prices, the report noted.
In the United States, the number of Americans filing claims for unemployment benefits fell last week, indicating that the labor market remained in a "slow-hire, slow-fire" mode, according to the report.
In China, the world's second-biggest economy, producer price inflation surged to a four-year high in June, piling pressure on manufacturers' profit margins as weak domestic demand limited pricing power, the report stated.
Price Snapshot
| Contract | Current Price (USD) | Weekly Change |
|---|---|---|
| Brent | $76.24/bbl | +6% |
| WTI | $72.04/bbl | +5% |
Source: Reuters / The Hindu Business Line
Outlook
The market remains caught between supply risks from the West Asia conflict and demand concerns from inflation and soft Chinese industrial demand. Traders will monitor any further developments in US-Iran hostilities and upcoming economic data for clearer directional cues.
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