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Oil prices experienced a decline of more than 1% on Friday, driven primarily by easing geopolitical concerns in the Middle East. US WTI crude futures for November delivery fell 1.35% to $90.25 per barrel, while Brent crude for December delivery decreased by 1.40% to $102.80 per barrel. The decline came after US diplomatic statements suggested a delay in potential military actions against Iran, reducing the immediate risk premium embedded in crude markets. Meanwhile, fresh US sanctions were announced targeting individuals and 17 tankers associated with Iranian oil transport to maintain economic pressure.
From a market perspective, crude prices were also influenced by supply disruptions in the Gulf of Mexico, where Hurricane Isaias forced producers to shut in approximately 1.3 million barrels per day, representing nearly 63% of the region's total output. Despite these significant domestic production halts, the broader sentiment remained skewed to the downside as traders shifted focus back to global supply and demand fundamentals and geopolitical developments.
Moving forward, energy markets will closely monitor the upcoming US oil and gas rig count report from Baker Hughes to gauge future domestic supply trends. Investors are evaluating whether the easing geopolitical geopolitical tensions will lead to further price consolidation or if supply constraints from weather events and ongoing sanctions will provide underlying support for crude benchmarks.
