Oil prices set to end week above $100 for first time in nearly 4 months

Brent crude ​futures rose 81 cents, or 0.8%, to $108.44 a barrel by 0345 GMT while US West Texas Intermediate crude rose 69 ‌cents, or 0.7%, to $103.17 a barrel

Oil prices rose on Friday and both major benchmarks are on track to end the week above $100 a barrel for the first time since mid-May, as increasing attacks along key shipping routes ​in the Middle East fuel fears of a prolonged disruption to supplies.

Brent crude ​futures rose 81 cents, or 0.8%, to $108.44 a barrel by 0345 GMT. US West Texas Intermediate crude rose 69 ‌cents, or 0.7%, to $103.17 a barrel. Both benchmarks rose more than 6% on Thursday.

On a weekly basis, the benchmarks were trading nearly 13% higher - the steepest gain since the week ended July 17.

 

Iran-aligned Houthis seized control of Yemen's port of Mocha on Thursday, posing a further threat to Red Sea traffic, while Gulf traffic remains restricted through the Strait of Hormuz as tanker attacks in the region have intensified in recent days.

Attacks from Yemen on Saudi energy facilities marked an escalation beyond Iran and the Strait of Hormuz and raised fears of prolonged disruptions in the broader region, analysts say.

"While meaningful volumes are still moving through the Strait of Hormuz, flows remain well below pre-war levels, underscoring how fragile the situation has become," ING analysts said in a note.

US DIESEL PRICES SURPASS $6 ‌A GALLON

Oil supply disruptions due to the US-Iran war, along with Ukrainian attacks on Russia's refineries, pushed the US national average diesel price past $6 a gallon for the first time ever on Thursday, according to price tracker GasBuddy.

Still, US President Donald Trump has not shown any signs of easing attacks on Iran. He warned the US may hit Iran's Pickaxe Mountain near its heavily damaged Natanz uranium enrichment facility, but said he thought the war would end immediately after the November midterm elections.

Iran said it had attacked 10 ships near the Strait of Hormuz on Wednesday, after the US hit five ​Iranian oil tankers. Iran's Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.

"With events spiralling ‌and Iran showing it is willing to stretch this conflict as wide and as long as it can, it is becoming increasingly likely that WTI crude will retest the $119.48 high from early March," IG analyst Tony Sycamore ​said.

Analysts said the ‌rally's durability will hinge on China, the world's largest crude importer. If China continues to buy, it could amplify the impact ‌of supply disruptions and drive prices higher.

OPEC lowered its forecast for world oil demand growth in 2026 to 380,000 barrels per day, a copy of its monthly report showed, marking the fifth straight downward revision. OPEC oil output ‌fell ​by 640,000 bpd in ​August, a Reuters survey found.

"The next leg in oil will depend less on headlines and more on whether physical flows improve or deteriorate further," said Phillip Nova analyst Priyanka Sachdeva.

"The question now is whether the ‌market can stabilise below $120, ​or whether another wave of supply disruption pushes crude into a completely new price regime."