Oil prices edged lower on Friday as traders weighed hopes for a possible truce between the US and Iran against continued attacks on energy infrastructure in the Middle East.
Brent crude fell 74 cents or 0.69% to US$105.85 a barrel at 0032 GMT, while West Texas Intermediate (WTI) declined 81 cents or 0.86% to US$93.80.
The modest retreat followed a volatile week in which both benchmarks gained as much as 5% on Thursday. Brent settled 3.4% higher while WTI rose 2.7%.
US and Iranian negotiators in New York are exploring a phased path towards ending the war, which could involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, according to sources close to the talks.
“Diplomatic hopes are essentially helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks,” said Tim Waterer, chief analyst at KCM Trade.
The potential reopening of the Strait of Hormuz remains a key focus for oil markets. Around a fifth of global oil and gas shipments have been curtailed since the war began at the end of February, contributing to a sharp rise in energy prices.
However, supply risks remain. Saudi Arabia said it had intercepted six ballistic missiles fired by Yemen’s Iran-backed Houthis, targeting areas including Taif and Yanbu.
“Ongoing attacks serve as a clear reminder that critical oil assets remain firmly in the firing line,” Waterer said.
Saudi Arabia is also increasing crude pumping volumes through its East-West Pipeline to the Red Sea export hub of Yanbu, although crude tanker loadings have yet to resume, according to industry sources, satellite imagery and shipping data.
Iranian President Masoud Pezeshkian said on Thursday that it was up to Washington to decide when the war would end.
“It’s America that must choose whether it wants to end this or not,” Pezeshkian said in an interview aired by Fox News.
Brent remains on track for a weekly gain of about 2.1%, while WTI is down around 6.4% for the week following six consecutive sessions of declines before Thursday’s rebound.
Reuters
