Oil set for sharp weekly drop but Middle East supply concerns provide floor

Still, the Brent contract is on track to drop by 12% ⁠this week after the December contract expired on October 30, while WTI ​is set to drop 12.1% this week.

The contracts plunged earlier this week on expectations that ​US Congressional elections on Tuesday, which swung the Senate and House of Representatives to the Democrat party and from Trump's Republicans, could lead to a de-escalation of the US-Israeli war against ​Iran, now in its ninth month.

Oil prices fell 8% on Wednesday alone after the ​Democrats swept the midterm elections, settling at two-month lows.

However, prices rebounded on a surge in tanker attacks on ‌Wednesday ⁠and Thursday in the Gulf and the Strait of Hormuz — the crucial sea outlet for a majority of Middle Eastern oil shipments — that renewed the concerns about supply flows from the region.

"Crude oil rebounded as traders viewed Wednesday's selloff as ​overdone," said Daniel ​Hynes, senior commodity ⁠strategist at ANZ, in a note on Friday. He said prices had been under pressure following the Democrat wins; however "the reality ​of the situation hit home" during Thursday's trading.

"Iran maintains control ​of the ⁠Strait of Hormuz and is unlikely to relinquish that control," he said, adding that overall flows through the Strait of Hormuz are under 60% of capacity.

Iran said ⁠on Thursday ​that three more tankers had been attacked in the ​Strait of Hormuz, and data from UK maritime security agency UKMTO suggested that attacks on tankers ​are still running at close to record pace.