LONDON: Oil prices slipped on Friday on signs that the U.S. may engage in dialogue with Iran over its nuclear programme, reducing concern over potential supply disruptions from a U.S. attack.
Brent crude futures were down 21 cents, or 0.3%, at $70.50 a barrel by 1219 GMT. The March contract expires later on Friday. The more active April contract lost 45 cents, or 0.65%, to $69.14.
U.S. West Texas Intermediate crude fell 38 cents, or 0.6%, to $65.04 a barrel.
“President Trump’s willingness to give diplomacy a chance regarding Iran seemingly makes a U.S. military intervention less likely than yesterday,” said PVM Oil Associate analyst Tamas Varga.
Middle East tensions and oil prices had increased this week as the U.S. strengthened its military presence in the region. U.S. President Donald Trump urged Iran on Wednesday to make a deal on nuclear weapons or face an attack but on Thursday said he was planning to speak to the country’s leaders.
Despite Friday’s declines, benchmark prices remained on track for large monthly gains. Brent crude was set for its biggest monthly jump since January 2022 and WTI was poised for its largest monthly gain since July 2023.
Price pressure also came from a rise in the dollar after it hit a four-year low earlier in the week. Friday’s dollar strength followed Trump’s announcement that he would pick former Federal Reserve Governor Kevin Warsh to head the U.S. central bank when Jerome Powell’s leadership term ends in May.
A stronger dollar can limit demand from oil buyers paying in other currencies.
“Rising U.S. crude oil output after shutdowns and Kazakhstan nearing the resumption of production at the Tengiz oilfield also contribute to the change in sentiment, and given the week’s bullish performance, it is reasonable to expect some profit-taking ahead of the weekend,” Varga added.
Meanwhile, peak maintenance periods for Russian primary oil refining this year are expected this month and in September, based on Reuters calculations using estimates from industry sources.
A Reuters poll of 32 analysts found that most expect prices to hold near $60 a barrel this year as the prospect of oversupply offsets potential disruption from geopolitical tensions.
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