Oil prices fell by 0.7% on Friday after jumping more than 3% yesterday. Yet both benchmarks remained on track for a second weekly gain. Investors are weighing the effects of hurricane damage on U.S. fuel demand against potential supply disruptions if Israel retaliates against Iranian oil facilities.
"Oil prices continue to rise week-on-week, driven by geopolitical risks. However, high crude inventories and uncertainty over the U.S. Federal Reserve's rate decisions have slowed the rally," said IG strategist Yeap Jun Rong.
Hurricane Milton's destruction in Florida could reduce U.S. fuel consumption, the world's largest oil producer and consumer.
Additionally, investors are closely monitoring the situation in the Middle East, with concerns over a possible Israeli strike on Iranian oil sites. While oil benchmarks surged earlier this month after Iran's missile attacks on Israel, prices have since stabilized. Israeli Defense Minister Yoav Gallant has warned that any response to Iran would be "lethal, precise, and surprising."
On the supply front, Libya’s National Oil Corporation announced it has restored production to 1.22 million barrels per day after overcoming its central bank crisis.