By Adedapo Adesanya
Crude oil settled lower on Friday as investors weighed factors such as possible supply disruptions in the Middle East and Hurricane Milton’s impact on fuel demand in Florida.
Brent crude oil futures went down by 36 cents or 0.45 per cent to $79.04 a barrel and the US West Texas Intermediate (WTI) crude futures shrank by 29 cents 0.38 per cent to $75.56 per barrel.
For the week, however, both benchmarks rose by more than 1 per cent.
Market analysts warned that development over Israel continue to hold over the market even after weeks since Iran’s massive missile attack.
There are talks that if Israel destroys Iran’s oil and gas infrastructure, prices will rise.
Crude benchmarks spiked so far this month after Iran launched more than 180 missiles against Israel on October 1, raising the prospect of retaliation against Iranian oil facilities.
However, Israel has yet to respond.
US President Joe Biden has warned Israel against hitting oil facilities in Iran, one of the world’s biggest producers.
Iran has warned that any attack on its infrastructure would provoke an even stronger response, with analysts warning that it could resort to placing pressure on important transit points like the Strait of Hormuz.
Iran has for years threatened to block the strategic Strait of Hormuz, through which around 20 per cent of the world’s oil supply flows.
A major disruption to the flow of oil and gas from the Middle East would affect the Chinese economy, which has faced its own challenges.
China, the world’s largest oil importer, imports an estimated 1.5 million barrels of oil a day from Iran, accounting for 15 per cent of its oil imports from the region.
Weather development in the US weighed on prices as
Hurricane Milton blew Florida, leading to petrol shortages as drivers stocked up ahead of the hurricane.
There are indications that the destruction could go on to dampen fuel consumption in the hurricane’s aftermath.
Florida is the third-largest petrol consumer in the US, but there are no refineries in the state, making it dependent on waterborne imports.