Picture: 123RF/EVGENI BASHTA
Picture: 123RF/EVGENI BASHTA

Tokyo — 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 US crude oil and product inventories.

Brent crude fell 20c, or 0.3%, at $65.17 by 2.40am GMT, and is heading for its first decline in six weeks, down 5%.

West Texas Intermediate (WTI) was down 20c, or 0.3%, at $59.36 and is also on track for a first weekly drop in six, nearly 6% from last Friday’s close based on the latest prices.

Oil is now below where it was before a US drone strike killed a top Iranian general on January 3, with Iran responding with a ballistic missile attack on Iraqi airbases hosting US forces this week that left no casualties.

“Though markets are rightly pricing in a lower risk of ... supply-side disruptions in the Middle East, we still say there remains some ongoing risk to output from geopolitical issues in the region,” JPMorgan 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 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 petrol inventories were up by the most in a week in four years, the US Energy Information Administration said on Wednesday.

“There’s too much supply out there,” a Japan-based based oil executive said.

Reuters