BEIJING: Oil prices edged down on Friday morning as investors weighed risks in the Middle East and possible US moves to ease restrictions on the world's "shadow fleet" of tankers.
Brent crude futures fell 41 US cents, or 0.39 per cent, to US$105.51 a barrel by 0012 GMT, while US West Texas Intermediate crude futures fell 54 US cents, or 0.55 per cent, to US$97.43.
WTI settled more than three per cent higher on Thursday after a large drawdown in US crude stocks supported prices, while Brent crude was little changed.
The International Energy Agency agreed on Thursday to release more than 20 million barrels of diesel to the market, along with any remaining oil from a record release of emergency reserves pledged in March to boost supply and cool soaring prices.
Oil prices rose overnight during the previous trading session, suggesting that "investors were dissatisfied with these measures", Haitong Futures said in a note on Friday.
"What would really cool the oil market is an easing of tensions in the Middle East."
The Trump administration is considering lifting sanctions on some so-called shadow fleet vessels that have transported oil and petroleum products from countries including Russia, Iran and Venezuela, in an effort to reduce record-high global freight rates, a US official said on Wednesday.
The discussions come days after President Donald Trump temporarily lifted sanctions on Russian diesel fuel, a move that drew strong criticism from Ukrainian President Volodymyr Zelenskiy, European countries and some of Trump's fellow Republicans in the US Senate.
Meanwhile, escalating conflict between Saudi Arabia and Yemen's Houthis, along with renewed attacks on ships in the region, supported prices.
Attacks around the waterway have surged over the past 10 days, with Iran saying it was stepping up strikes in response to the US blockade of its ports and tougher sanctions introduced last month.
The Houthis fired missiles at the presidential palace complex in the southern city of Aden on Thursday, killing two guards, while the Saudi-led coalition in Yemen detailed dozens of attacks on Saudi infrastructure amid the escalating conflict.
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