Oil Prices Dip as Markets Weigh Iran Truce Possibility
Oil prices dipped on Friday as markets reacted to the possibility of a truce between the US and Iran, which has been weighing heavily on global markets. The spread between Brent and WTI was at its widest since May, with Brent down 87 cents or 0.82% at $105.73 a barrel, while West Texas Intermediate was down $1.56 or 1.65% at $93.05 a barrel.
The price dip comes after a week of volatility, which saw oil prices rise to a one-week high yesterday. Brent notched its highest close since September 15, and WTI saw its first rise in days, ending a 13% drop over the prior six sessions. It's down 6.42% for the week compared to Brent's 2.09% rise.
Fears of a US ban on diesel exports have contributed to the price bifurcation between the two benchmarks, with the WTI-Brent spread at $12.68, its widest since May. Tim Waterer, chief analyst at KCM Trade, said that the wide spread reflects different regional risk profiles at play.
The news of a possible truce comes as US and Iranian negotiators explore a phased path out of war in New York. Iranian President Masoud Pezeshkian stated that it's up to the US to choose when the Iran war will end, saying 'It's America that must choose whether it wants to end this or not.'
Ongoing attacks by Houthi rebels on Saudi Arabia have also contributed to market uncertainty, with critical oil assets remaining in the firing line. Waterer noted that ongoing attacks serve as a reminder of the risks involved.