Crude oil prices dipped from Thursday’s close earlier today but Brent crude was on track for a weekly gain on continued concern about the security of supply from the Middle East. The concern persists despite reports about a possible deal between the United States and Iran, as well as estimates of oil flows out of the Strait of Hormuz.
At the time of writing, Brent crude was trading at $105.65 per barrel, up from around $102 per barrel on Monday. West Texas Intermediate, on the other hand, is ending the week with a dip, trading at $93.11 per barrel at the time of writing, down from around $98 at the beginning of the week.
Prices got some substantial support this week from the Yemeni Houthis’ attacks on Saudi Arabia. These are still escalating, with the group saying Thursday they had fired a barrage of missiles and drones at Saudi targets, including the Yanbu port on the Red Sea, which has become Saudi Arabia’s main oil export terminal.
The United States and Iran are, meanwhile, reportedly discussing a ceasefire under which Iran would reopen the Strait of Hormuz in exchange for the United States lifting its naval blockade on the country. “It’s America that must choose whether it wants to end this or not,” Iranian president Masoud Pezeshkian said on Thursday, as quoted by Reuters.
As things stand now, oil prices are likely to remain above $100 per barrel, according to Sparta Commodities’ senior oil market analyst June Goh. “With no clear resolution in sight, the gap in oil inventories globally is getting wider,” she told Al Jazeera.
“Diplomatic efforts on the sidelines of the UN are providing some counterweight, but until there is clearer evidence of a durable de-escalation, the upside bias remains in place,” KCM Trade chief market analyst Tim Waterer told the publication.
By Irina Slav for Oilprice.com
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