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

Both contracts gained for a second day. 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%.

Read:Oil rises on Iran war uncertainty after Trump's Republicans face election rout. The contracts plunged ​earlier this week on expectations that US midterm elections on Tuesday, which swung the Senate and House of Representatives to the Democratic Party 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 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.

Read more:Oil falls for a fourth day on expectations for lower risk of Iran war escalationKCM chief analyst Tim Waterer described Friday's rise as a "technical recovery" ​from the steep selloff ​after the US ⁠elections, but said the underlying driver was a realisation that the problem had not disappeared and attacks in the Strait of Hormuz ​were unaffected by a Democratic win.

"Until there is a credible ​path to ⁠safer, cheaper transit through the Gulf, oil is likely to remain supported on dips and prone to sharp moves on any escalation headlines," he said.

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