Oil prices slipped Friday but remained on track to end the week above $100 a barrel for the first time since mid-May and U.S. diesel prices hit a record high, as attacks along key Middle East shipping routes stoked prolonged supply disruption fears.
Brent crude futures fell $1.65, or 1.53%, to $105.98 a barrel by 0758 GMT. U.S. West Texas Intermediate crude fell $1.36, or 1.33%, to $101.12 a barrel.
The benchmarks pared all early gains to trade lower after the Financial Times reported that foreign ministers in the Middle East are trying to work out a temporary deal with Iran to manage shipping through the Strait of Hormuz.
Both benchmarks rose more than 6% Thursday and were still trading more than 10% higher on a weekly basis.
"Some headlines of possible new talks in the Middle East are weighing moderately on oil prices today," said UBS energy analyst Giovanni Staunovo, adding: "I keep seeing near-term risks to the upside for oil prices, but we should expect ongoing high price volatility too."
