Oil prices eased on Friday after rising to their highest since December in the previous session, but were set for their biggest weekly gain since October as positive US economic growth and signs of Chinese stimulus boosted fuel demand sentiment.
Brent crude futures were down 38 cents, or 0.46%, to $82.05 a barrel by 0445 GMT.
US West Texas Intermediate crude fell 50 cents, or 0.65%, to $76.86. The Brent benchmark was set to close 4.5% higher for the week, while the US benchmark was set to rise 4.8%.
Both were on track for their second straight week of gains and the biggest weekly increase since the week ending Oct. 13 after the start of the Israel-Hamas conflict in Gaza.
Prices slipped somewhat on Friday on signs that oil supply disruptions in the Red Sea may ease as China is pressuring Iran to curb attacks on shipping in the waters off Yemen by the Iran-aligned Houthi militia that the group started in retaliation to Israel’s Gaza attacks.
Chinese officials have asked their Iranian counterparts to help rein in the attacks or risk harming business relations with Beijing, sources said.
However, the Houthis are vowing to continue targeting ships linked to Israel until aid reaches Palestinians in Gaza, the group’s leader said on Thursday.
Previous interventions by US and UK forces in the Red Sea had not prevented attacks, leading investors to price in continued disruption, said Yeap Jun Rong, a market strategist at IG in Singapore.
Those disruption concerns are evident in the market structure of Brent futures.
The premium of the first-month Brent future to the sixth-month contract rose to $2.53 per barrel, the highest since November.
Oil perks up nearly 2% on US crude stock draw, Red Sea tensions
This market structure, known as backwardation, when prompt prices are higher than later prices indicates traders are expecting supply tightness and stronger demand.