Oil prices declined from six-month highs on Friday as traders assessed Middle East risks. Brent fell below $116 a barrel after surging to a six-month peak, while West Texas Intermediate hovered near $102. President Donald Trump told Fox News it is "decision time" on a deal with Iran, while Iran's Foreign Minister Abbas Araghchi said attacks would be avoided if rationality prevailed.
On the technical front, Brent's 14-day relative-strength index topped 74, signaling overbought conditions and a potential pullback. Brent has surged about 90% this year due to Middle East conflict, including Yemen's Houthi rebels targeting Saudi Arabia. Investors are braced for Israeli elections on Tuesday and US midterms in early November.
In recent days, Washington ordered a wider evacuation of diplomatic personnel from the Middle East, and President Trump hinted forces could resume strikes after the Nov. 3 vote. Iran is preparing to retaliate against Israel and the UAE. Fighting between Iranian-backed Houthis and Saudi Arabia intensified over the weekend, with rebels claiming strikes on King Khalid International Airport in Riyadh.
Commonwealth Bank of Australia analyst Vivek Dhar warned oil futures may need to rise to $150 a barrel to force demand destruction in emerging Asia. At present, Middle East crude shipments have recovered to near pre-war levels through the Strait of Hormuz, despite Iranian vessel attacks. Jorge Leon of Rystad Energy AS noted the market prices in escalation risk after US midterms, when Washington may feel less constrained by political costs.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing