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Brent futures are down by nearly $2 as the U.S. delays its decision on direct Iran participation

Brent futures are down by nearly $2 as the U.S. delays its decision on direct Iran participation

Brent crude prices lost ground from their previous session on Friday, falling nearly $2 after the White House deferred a decision about U.S. participation in the Israel-Iran Conflict. However, they are still on track for a record third consecutive week of positive price movements.

Brent crude futures dropped $1.89 or 2.4% to $76.96 per barrel at 0255 GMT. Weekly, the price was up by 3.8%.

U.S. West Texas Intermediate Crude for July grew by 53 cents or 0.7% to $75.67. The WTI for August, which is more liquid, rose by 0.2% or 17 cents.

The prices of goods and services rose by almost 3% as Israel bombed Iranian nuclear targets and Iran launched missiles and drones against Israel, after it had struck an Israeli hospital over night. Israel's and Iran's week-old conflict showed no sign of a truce.

Brent futures pared previous session gains after the White House commented that President Donald Trump would decide whether or not the U.S. gets involved in the Israel/Iran conflict within the next two week.

Oil prices surged amid fears that the U.S. would increase its involvement in Israel's conflict against Iran. "The White House Press Secretary later said that there was still enough time to de-escalate," said Phil Flynn of The Price Futures Group.

Iran is the third largest producer of crude oil among the members of the Organization of Petroleum Exporting Countries. It extracts about 3.3 millions barrels of crude oil per day.

Around 18 to 21 million barrels of oil per day (bpd) and oil products pass through the Strait of Hormuz on the southern coast of Iran. There is widespread concern that the fighting may disrupt the trade and supply.

Trump has also used the "two-week" deadline in making other important decisions. Often, these deadlines are not met, which could lead to the crude oil price remaining high and possibly building on recent gains, said Tony Sycamore. (Reporting and editing by Shri Navaratnam; Sudarshan Varadhan)

(source: Reuters)