Oil prices dropped on Friday extending days of losses as the threat of war in the Middle East receded and investors switched attention to economic growth prospects and the rise in U.S. crude oil and product inventories.
WTI was down 50 cents, or 0.82%, at $59.06 and also on track for a first weekly drop in six, nearly 6% from last Friday’s close based on the latest prices.
Brent crude fell 33 cents, or 0.3%, at $65.04 by 0240 GMT, and is heading for its first decline in six weeks, down 5%.
Oil is now below where it was before a U.S. drone strike killed a top Iranian general on Jan. 3, with Iran responding with a ballistic missile attack on Iraqi air bases hosting U.S. forces this week that left no casualties.
“Although markets are rightly pricing in a lower risk of … supply-side disruptions in the Middle East, we still think there remains some ongoing risk to output from geopolitical issues in the region,” J.P.Morgan said in a commodities note.
A Ukrainian airliner that crashed in Iran in the early hours of Wednesday after Iran launched the attacks on the bases in Iraq, was likely brought down by an Iranian missile, Canada’s Prime Minister Justin Trudeau said on Thursday.
All the nearly 180 passengers on board the Ukraine International Airlines flight to Kiev from Tehran died in the crash. Iran denied it was hit by a missile.
For now though oil investors are focusing on areas away from the conflict.
Crude stocks in the world’s biggest producer rose against forecast last week and gasoline inventories were up by the most in a week in four years, the U.S. Energy Information Administration said on Wednesday.
“There’s too much supply out there,” a Japan-based based oil executive told Reuters.