Oil prices pulled back on Friday after their biggest one-day jump in weeks, as Donald Trump’s pledge to avoid attacking Iran before the US midterm elections removed some of the immediate geopolitical premium from crude.
Brent fell about 1.3% to $102.91 a barrel in Asian trade, while West Texas Intermediate slipped to roughly $90.40.
The retreat followed Thursday’s 4.1% surge in Brent to $104.28 and a 3.6% rise in WTI to $91.49. Both benchmarks had gained more than $5 intraday.
The pullback suggests traders are unwinding the most aggressive escalation bets. It does not yet suggest that the $100 Brent problem has gone away.
Trump removes one risk, but Hormuz remains bigger problem
Trump said Washington was holding productive discussions with Tehran and would not attack Iran before the November 3 elections.
That directly countered reports that the Pentagon was preparing options for renewed military operations, including strikes on Iranian energy and infrastructure targets.
Yet the physical threat to supply remains.
At least nine vessels were hit around the Strait of Hormuz in the week through October 5, according to UN data.
Crude flows through the waterway have also fallen sharply from late-September levels.
Hani Abuagla, senior market analyst at XTB MENA said that continuing Middle East shipping risks should keep crude elevated even if the immediate threat of a US strike recedes.
Hurricane disruption keeps WTI supported near $90
The other supply shock is much closer to the US.
Hurricane Isaias has forced operators in the Gulf of Mexico to shut about 1.28 million barrels a day of crude production, equivalent to 62.9% of current offshore output, according to the Marine Minerals Administration.
That disruption should be temporary if offshore infrastructure escapes significant damage, making it less durable than the Hormuz risk.
Ole Hansen of Saxo Bank, in comments carried by Financial Express, said the broader market nevertheless remains unusually tight, pointing to surging shipping costs and exceptionally high diesel and jet-fuel benchmarks as evidence that crude availability is only part of the problem.
$100 oil remains an inflation and rates problem
Even after Friday’s retreat, Brent remains above a level that is uncomfortable for central banks and bond investors.
The US 10-year Treasury yield reached about 5.34% this week, its highest since 2002, as higher energy prices revived concerns that inflation could remain sticky.
Scotiabank strategists argued that the oil spike was feeding directly into global rates, with WTI above $90 adding to pressure on long-term yields.
Fundamentals also suggest $100 Brent is not purely a war premium.
The US Energy Information Administration this week raised its fourth-quarter Brent forecast to an average of $105, citing constrained Middle East flows, falling inventories and tight diesel markets.
The IEA is accelerating emergency stock releases, with roughly another 100 million barrels still available under its March programme.
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