Oil prices retreat as traders lock in gains despite Middle East tensions and a larger-than-expected US inventory drawdown.
West Texas Intermediate crude fell to near $80.50 in early European trading Friday, reversing gains as profit-taking followed a sharp rally. The decline occurred despite heightened geopolitical risks in the Middle East, where ongoing conflicts persist.
US crude inventories dropped by 7.167 million barrels for the week ending July 24, exceeding expectations of a 2.5 million-barrel decline. The prior week saw a 2.011 million-barrel increase. Meanwhile, traffic through the Strait of Hormuz rose, with 14 commodity vessels transiting Wednesday, up from single digits last week.
Iranian threats to close the Strait and retaliatory strikes against US bases in the region contrast with increased naval escorts for tankers. Market sentiment remains cautious as OPEC+ prepares to unwind voluntary production cuts.