Oil Falls, Supply Risks Remain Strong
Oil prices weakened on Friday (July 24th), although they remained on track for strong weekly gains. Brent crude fell 3.3% to US$97.39 per barrel, while WTI fell 2.6% to US$89.78 per barrel.
The correction occurred after oil prices had surged due to concerns about supply disruptions from the Middle East conflict. However, the lack of signs of easing tensions has limited downward pressure on prices.
Brent has strengthened more than 9% this week and is poised to post a third consecutive weekly gain. Previously, Brent prices had broken through US$100 per barrel for the first time since May.
Tensions escalated after the United States military completed its 13th wave of attacks on Iranian targets. The attacks targeted military assets, drone storage sites, and coastal surveillance posts, which were seen as supporting attacks on ships in the Strait of Hormuz.
Iran has also reportedly rejected a US-backed ceasefire proposal. Supply risks have intensified after the Houthi group attacked two Saudi oil tankers in the Red Sea, near the crucial Bab el-Mandeb waterway.
Oil prices have the potential to remain highly volatile as the market continues to monitor the Strait of Hormuz and Bab el-Mandeb. As long as the conflict persists, the risk of supply disruptions could keep Brent prices high, although profit-taking could trigger a short-term correction. (arl)
Source: Newsmaker.id
