But some analysts still worry that Iraq's oil production could be harmed: File Image/PixaBay
For a week that began with traders causing crude prices to skyrocket due to fears of all-out war between the U.S. and Iran, all it took on Friday was two-day old news of rising inventories to erase risk premium and cause the commodity to incur its first weekly loss since late November.
Wednesday's disclosure from the Energy Information Administration that crude and gasoline inventories in the U.S. rose unexpectedly last week resulted in traders putting geopolitical hostilities in the back seat and causing global benchmark Brent to settle down 39 cents to $64.98.
West Texas Intermediate fell 52 cents to end at $59.04 per barrel; for the week, WTI incurred a 6.4 percent decline, and Brent had a 5.3 percent loss.
John Kilduff, founding partner, Again Capital
Rising inventories reminded folks this is still a somewhat oversupplied oil market
John Kilduff, founding partner at Again Capital, explained traders' sentiments by remarking, "We're heading into a slack (fuel) demand period ahead of the summer driving season and rising inventories reminded folks this is still a somewhat oversupplied oil market."
As for the Iranian situation, the fears of earlier this week seemed to be assuaged not so much by the Islamic republic's failed missile strike against U.S. forces in Iraq and its subsequent stand down, but the fact that the hostilities caused no disruption in Middle East oil production.
Still, some analysts worry about possible attacks on oil facilities in Southern Iraq that could affect crude supplies into Asia.
Henning Gloystein, director for global energy and natural resources at Eurasia Group, told media that facilities in Iraq's southern province of Basra are "right at the heart of the geopolitical risk world at the moment; this is where the oil market fears a confrontation because if that gets hit, markets will get into trouble, especially in Asia."
But he conceded that "There's so much oil in the market right now that a single disruption, or even a small series of disruptions in the Middle East, doesn't impact the world as much as it did five or ten years ago."
Bloomberg noted that in addition to ample American supplies, members of the Organization of Petroleum Exporting Countries (OPEC) "are sitting on huge amounts of spare capacity after cutting production for most of the past three years."