Oil prices close on a mixed note, but significantly up for the week on supply concerns
Oil prices were volatile on the last working day of the week on Friday, but up on the week, as traders balanced supply disruptions against the prospective reopening of peace talks between the US and Iran that could assist to mitigate those disruptions.
Brent crude futures closed 26 cents, or around 0.3%, higher at $105.33 a barrel. U.S. West Texas Intermediate futures closed at $94.40 a barrel, down $1.45, or 1.5%.
Brent was up about 16% for the week while WTI gained almost 13%.
Crude prices fell back from early gains after Reuters reported that Iranian Foreign Minister Abbas Araqchi was expected in Islamabad late on Friday to discuss plans to resume peace talks with the US after the failure of talks earlier this week.
Prices fell further when CNN reported that US President Donald Trump was sending special envoy Steve Witkoff and Jared Kushner to Pakistan to have discussions with Iran’s foreign minister.
Later Trump told Reuters that Iran plans to make an offer to satisfy US expectations.“They’re making an offer and we’ll have to see,” Trump remarked.
Prices were up 2% early in the session on fears of additional military escalation in the region, a day after Iran published film of commandos boarding a cargo ship in the Strait of Hormuz, and as work stalled on re-opening the key waterway.Traders are closing length ahead of a highly uncertain weekend and will reposition their bets Sunday night depending on developments in Iran, said Tamas Varga of oil trader PVM.
The Strait of Hormuz, through which nearly a fifth of the world’s oil flowed before the war, is virtually closed to navigation. Iran’s seizure of two cargo ships showed the difficulty Washington has in controlling the passage.
Shipping data revealed only five ships including an Iranian oil products tanker have transited the Strait of Hormuz in the past 24 hours.
The US stated Iran might have “loaded up” its arsenal “a little bit” during a two-week ceasefire but that the US military could eradicate it in a single day. On Wednesday he claimed he would prolong the ceasefire indefinitely to allow for more peace negotiations.Oil consultant Jim Ritterbusch of Ritterbusch and Associates said the open-ended cease-fire is likely to be accompanied by an ongoing fight as tensions have been on the rise this week in the absence of any meeting between the US and Iran.This favours still higher prices, notably Brent and diesel, the markets most sensitive to a continuation of this war.”
Haitong Futures stated in a research that oil prices could surge to new highs this year if peace talks show no progress by the end of April and fighting restarts.