Price of Brent crude oil was heading for around 5% weekly gain on Friday as investors worry that the tensions between the U.S. and Iran increase the risk for secure supply of oil from the Middle East to the global market.
The international benchmark was trading at $65.12 per barrel at 1208 GMT for a 4.9% weekly increase after it started the week at $62.07 a barrel. The benchmark climbed Friday to as high as $65.75 a barrel -- its highest level since May 31.
American benchmark West Texas Intermediate (WTI) was trading at $57.33 a barrel at the same time, heading to post a 9.2% weekly gain, after opening Monday at $52.50 per barrel. WTI climbed to as much as $57.97 a barrel on Friday, to mark its highest level since May 30.
Brent gained almost 2% and WTI rose 3.8% on Tuesday after Sino-American trade woes abated with U.S. President Donald Trump said he will hold a meeting with his Chinese counterpart Xi Jinping next week at the G-20 summit in Japan.
Trump's statement calmed investors that global oil demand would not be too low this year if U.S. and China would agree on a trade deal.
However, the global economic growth outlook continues to worry investors that an economic slowdown in major economies could be around the corner, especially with major central banks signaling interest rate cuts, preparing for a slower growth rate next year.
U.S.-based rating agency Fitch Ratings said Monday it now expects global economic growth to decrease from 3.2% in 2018 to 2.8% in 2019, and to 2.7% in 2020.
Bank of America Merrill Lynch lowered its oil price estimate for the second half of 2019, and it now forecasts Brent to average $63 a barrel, down from the previous estimate of $68 per barrel.
Both European Central Bank and U.S. Federal Reserve signaled this week that they could lower their interest rates if economic indicators would suggest a slowdown.
On the supply side, it was rising tension between the U.S. and Iran that created an upward pressure on oil prices.
Crude prices posted their biggest percentage gain on Thursday with Brent jumping 4.6% and WTI soaring 6.8%, after Iran shutdown an American reconnaissance drone and Trump responded by saying "Iran made a very big mistake!" on Twitter.
Strait of Hormuz, the world's largest oil transit chokepoint, saw a daily average oil flow of 21 million barrels per day (bpd) in 2018, according to the U.S.' Energy Information Administration (EIA).
That amount was also equivalent of approximately 21% of petroleum liquids consumption in the world last year, according to the EIA.
By Ovunc Kutlu