Crude oil futures pared early gains and settled modestly lower on Friday, but still closed the week with solid gains, amid prospects of supply disruptions due to escalation in tensions in the Middle East.
The unexpected increase in U.S. crude inventories in the previous week and prospects of a drop in global energy demand in the event of the U.S. and China failing to end their trade dispute limited oil's decline.
West Texas Intermediate Crude oil futures for June ended down $0.11, or 0.17%, at $62.76 a barrel, after rising to a high of $63.64 earlier in the session.
On Thursday, WTI crude futures for June ended up $0.85, or 1.4%, at $62.87 a barrel. For the week, WTI crude oil futures gained 1.8%.
Brent crude oil futures were trading lower by nearly $0.50, at $72.11 a barrel about an hour past noon. For the week, Brent crude oil futures gained more than 2%.
OPEC-led supply cuts and the U.S. sanctions on Iranian oil have significantly reduced the supply level in global crude market this year.
The tensions in the Middle East following the attacks on Saudi Arabia's oil infrastructure and the subsequent airstrikes carried out by the Saudi-USE-led coalition on the Houthi-held capital Sanaa this week, have raised concerns about supply disruptions in the region.
Meanwhile, Iran's foreign ministry is reported to have rejected accusations by Saudi Arabia that Tehran had ordered an attack on Saudi oil installations claimed by Yemen's Iran-aligned Houthi militia.
Markets look ahead to the upcoming meeting of the OPEC/non-OPEC Joint Ministerial Monitoring Committee, scheduled to take place in Jeddah this Sunday, for clues about the oil cartel's further plans for reductions in outputs, if any.