Oil Retreats from 5-Month High

Oil prices fell as investors rushed to take profits after prices hit their highest levels in several months at the end of last week, while attention remained focused on the potential impact of the ongoing wars in the Middle East and Ukraine on the global oil supply-demand balance.

Brent crude futures fell $1.45, or 1.32 percent, to $108.41 per barrel, after settling on Friday at their highest level since May 19.

US West Texas Intermediate crude fell 32 cents, or 0.32 percent, to $101.09 per barrel, after reaching its highest settlement level since September 17 on Friday.

Giovanni Staunovo, an analyst at UBS, said oil prices continued to be supported by ongoing targeting of ships passing through the Strait of Hormuz, as well as supplies flowing through the strait remaining below pre-conflict levels.

In a Friday note, Kpler analytics said intensified attacks on commercial ships had sharply reduced Gulf crude flows to an average of around 8.5 million barrels per day over the past seven days, down from more than 20 million barrels per day in the previous week. It added that at least ten confirmed incidents involving commercial ships were reported last week.

Bjarne Schieldrop, an analyst at SEB, said it was uncertain whether the recent increase in exports through the Strait of Hormuz would continue, as Iran was likely to escalate its attacks further in the period leading up to the US midterm elections on November 3.

Egypt said it was ready to provide the support Saudi Arabia needs to defend its security and stability against the Iran-aligned Houthi group in Yemen.

Four government and medical sources told Reuters that at least 18 people were killed on Monday in a Houthi attack on a Yemeni government military training camp in Shabwa province.

US President Donald Trump signed an executive order on Friday exempting some Russian exports from sanctions and tariffs.

The exemption followed an agreement Trump reached with Russian counterpart Vladimir Putin to export diesel to the United States and other countries, starting at around 2.3 million barrels this month before rising to approximately 7.6 million barrels per month.

However, Secretary of State Marco Rubio said the president would use a period of up to 60 days to assess the economic impact of sanctions and tariffs on the global economy.

Priyanka Sachdeva, head of market insights at Philip Nova, said Trump’s move appeared to be another desperate attempt to keep oil prices under control ahead of the US midterm elections, adding that it did little to address the actual supply crisis in the Strait of Hormuz, where attacks on oil tankers continued.