Futures Movers: Oil prices slip as IEA predicts weak demand; Strait of Hormuz stays in focus

Oil prices slipped Friday after the International Energy Agency cut its global oil demand growth forecast, taking some attention away from fresh tensions in the Middle East sparked by an attack on two tankers in the Strait of Hormuz.

West Texas Intermediate crude for July delivery CLN19, -1.05%  fell 37 cents, or 0.7%, to $51.90 a barrel. The tanker attacks drove a 2.2% gain for oil on Thursday, but the contract is still facing a weekly loss of 3.8% with one session to go.

August Brent crude BRNQ19, -0.83%  eased 7 cents, or 0.1%, to $61.24 a barrel after a gain of 2.2% of Thursday. Brent is down about 3.3% for the week so far.

U.S. Secretary of State, Mike Pompeo, accused Iran of orchestrating a series of attacks on tankers in the Strait of Hormuz on Thursday to get the U.S. ease up on sanctions. The narrow waterway is seen as the world most sensitive crude transportation choke point.

Read: Strait of Hormuz: Oil choke point in focus after suspected attacks on tankers

While Iran has denied any involvement, the U.S. military on Friday released a video showing what it claimed was Iran’s Revolutionary Guard removing an unexploded limpet mine from one of the oil tankers targeted near the key waterway.

Read: Escalation in Mideast oil attacks could add $7 per barrel to prices

Thursday’s gains came on the heels of sharp losses for oil on Wednesday, driven by a bigger-than-expected climb in U.S. crude inventories. WTI slid 4% to $51.14 on Wednesday, marking the lowest front-month contract finish since Jan. 14, according to Dow Jones Market Data. Simmering worries about energy demand on the back of growing U.S.-China trade tensions also pressured the commodity.

In closely watched oil-market report, the IEA downgraded its forecast for global oil demand for a second straight month, to 1.2 million barrels a day from 1.3 million barrels a day the previous month. The Organization of the Petroleum Exporting Countries cut its forecast for growth in world oil demand on Thursday.

The market is also awaiting a decision by OPEC and its allies on whether to extend their production-cut deal past the end of this month, when it expires.

In other energy trading, July gasoline RBN19, -0.34%  rose 0.3% to $1.7258 a gallon, while July heating oil HON19, -0.30%  rose 0.5% to $1.8154 a gallon.

July natural gas NGN19, +0.30%  rose 0.4% to $2.334 per million British thermal units.

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