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Oil prices fell on Friday as concerns over Middle East supplies eased after US President Donald Trump said his country would not attack Iran before the US elections scheduled for next month, amid constructive talks to end the war that has caused global market turmoil.
Brent crude futures fell $1.37, or 1.3%, to $102.91 a barrel, while US West Texas Intermediate (WTI) crude futures fell $1.09, or 1.2%, to $90.40.
However, Brent is heading for weekly gains after rising 4% at settlement on Thursday due to an increase in attacks on ships transporting crude oil from the Middle East earlier this week.
WTI is expected to post a slight weekly decline.
Trump said on Thursday that Washington is holding "productive discussions" with Iran, and confirmed there are no plans to launch any attack before the congressional midterm elections scheduled for November 3, following media reports that he was considering an attack before that date.
The Iranian Tasnim News Agency quoted Foreign Minister Abbas Araghchi on the same day as saying that Tehran is studying the US response to its proposal to reopen the Strait of Hormuz within 7 days.
The United States continues to exert economic pressure on Iran in an attempt to end the war. On Thursday, the US imposed new sanctions targeting individuals, networks, and 17 ships for transporting Iranian crude oil, petroleum products, and petrochemicals.
Prices saw volatility this week with increasing threats targeting oil shipments in the Gulf and the Strait of Hormuz, through which shipments equivalent to about 20% of total global oil and fuel passed before the war broke out.
Reuters reported on Friday, citing sources, that China, the world's largest oil importer, is preparing to resume refined fuel exports after a brief pause during the Golden Week holiday, a move that will help ease supply shortages in global markets for diesel, gasoline, and jet fuel.
The International Energy Agency agreed this week to accelerate the pace of withdrawals from oil stocks and prioritize diesel supplies, under a plan launched in March.
The oil market is also facing the repercussions of Hurricane Isaias in the Gulf of Mexico, as the hurricane led to the suspension of production of about 1.3 million barrels per day, equivalent to 62.9% of current oil production as of yesterday, Thursday, according to data from the US Bureau of Ocean Energy Management.
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