- Brent, WTI fall by more than 5% before paring losses
- Trump vows to punish Iran for Houthi Red Sea attacks
- Strait of Hormuz tanker crossings subdued
HOUSTON, July 24 (Reuters) – Crude oil futures prices were more than 4% lower on Friday after sources said that China had initiated a push to resume stalled peace talks between the United States and Iran, but remained on track for hefty weekly gains.
Both Brent and U.S. West Texas Intermediate crude have rallied this week as the United States and Iran exchanged missile strikes, traffic through the Strait of Hormuz fell to a trickle and Yemen’s Houthis attacked shipping in the Red Sea.
Get the Latest US Focused Energy News Delivered to You! It’s FREE:
Brent futures settled at $96.78 a barrel, down $3.91, or 3.88%, having settled above $100 in the previous session for the first time since May. The contract remained on course for a gain of nearly 10% this week.
West Texas Intermediate (WTI) futures finished at $89.31 a barrel, down $2.88, or 3.12%, on track for an 8.27% weekly rise.
“There’s nothing this market loves more than hope,” said John Kilduff, partner at Again Capital.
“Nobody wants to get suckered, so any hint this may get settled they will take,” Kilduff said. “Nobody wants to think we’re on a one-way course.”
Energy markets were in a precarious state on Friday, said Phil Flynn, senior analyst with Price Futures Group.
“Overall stocks remain pretty tight — and that situation could turn on a dime, so it’s worth keeping a close watch as things develop,” Flynn said.
U.S. President Donald Trump promised “major military punishment” for Iran and its Houthi allies after the strikes on two Saudi oil tankers in the Red Sea.
Iran had been pressing the Houthis to close the Bab el-Mandeb gateway to the Red Sea if the United States continues to attack Iranian power infrastructure. It is the second most important route for energy shipments after the Strait of Hormuz at the mouth of the Gulf.
Additionally, the Houthis declared on Monday that they were imposing a naval blockade on Saudi Arabia, which had been diverting its oil via pipeline to get around Iran’s closure of the Strait of Hormuz.
Daily vessel transits through the strait were steady at three for each of the past three days, preliminary ship-tracking data from Kpler showed. Another two ships — including empty very large crude carrier Noble — entered the Gulf via the strait on Thursday.
Meanwhile, at Bab el-Mandeb, commodity vessel transits totaled 32 on July 23, up from 26 the day before, Kpler data showed, with two crossings for July 24 so far.
“In the right seas, ships are still moving … so it’s not a complete blockade as some might have feared,” said Giovanni Staunovo, a UBS analyst.
Analysts at JPMorgan said in a note that each additional month of disruption to oil supply would add around $7 to $8 a barrel to Brent, lifting monthly average prices to around $114 a barrel if disruptions extend to three months.
Elsewhere, Russia said on Friday that its forces struck three Ukrainian ports overnight targeting infrastructure — including loading and unloading facilities and fuel reserves — which supported Ukraine’s armed forces.
On Thursday, Kazakhstan’s energy ministry said oil companies temporarily reduced production after suspected Ukrainian drone attacks forced the country’s main Black Sea export terminal to close.
Reporting by Erwin Seba, Seher Dareen. Colleen Howe, Siyi Liu; Editing by Elaine Hardcastle, Will Dunham and Kirsten Donovan
Share This:
More News Articles
