Oil prices retreated on Friday but remained on track for a nearly 10% weekly gain after topping $100 a barrel for the first time in months. At 6:27 a.m. ET, next month’s Brent crude oil futures, the global benchmark, fell 3.58% to trade at $103.78 a barrel. West Texas Intermediate futures, its US counterpart, fell 2.17% to $99.23 per barrel. On Thursday, Brent crude oil hit a high of around $108 a barrel, while WTI hit over $104. Stock Chart IconStock Chart IconCrude Oil FuturesBrent futures were on track for an 8.4% weekly gain and were set to finish the week above the critical $100 mark for the first time since mid-May. WTI’s gain so far this week stood at 9.2%. Friday’s drop snaps five straight days of gains for Brent crude and an eight-day winning streak for WTI. Markets are bracing for a prolonged war with Iran, reacting to the escalating conflict in the Middle East and a Wall Street Journal report that said top White House advisers had discussed with President Donald Trump the possibility of the conflict extending beyond his current term. Trump has said the conflict will end after the US midterm elections, and that oil and gas prices will also fall after the critical November vote. “Once again, it’s geopolitical fears driving everything,” Deutsche Bank’s Jim Reid said in a Friday morning note. “In terms of the latest headlines from the Middle East, growing concerns about the security of Red Sea shipping and the potential knock-on effects for Saudi oil exports were seen yesterday as Houthi rebels captured the port city of Mokha in Yemen, which lies near the Bab el-Mandeb Strait at the southern end of the Red Sea. The mood was also not helped by the news that Saudi Arabia’s oil production has fallen to its lowest level since 1990.” Tamas Varga, an analyst at PVM Oil Associates, told CNBC that the question for investors was whether the current supply deficit is structural or temporary. “While further peaks cannot be ruled out and re-reaching the April high of $126 remains a possibility as global and regional oil inventories continue to decline, it should be noted that [the] “The more oil prices rise, the more demand will be eliminated,” he said. “The difference between the current crisis and… the one experienced in 1990, during the first Gulf War, is that today oil is more elastic than it was 35 years ago.” Varga said renewable energy is “more than capable” of replacing “certain parts of the barrel,” especially in electricity generation. “Demand is decreasing due to the widespread use of alternative energy sources,” he added. “In the meantime, it is very possible that the price of oil will continue to strengthen, but it would be surprising if it lasted beyond 2026.”
