Oil Prices Fall as Hormuz Hopes Offset Iran Tensions

Oil prices fell on Friday and recorded sharp weekly declines as traders assessed signs of a possible reopening of the Strait of Hormuz, changing expectations over US interest rates and geopolitical developments affecting global crude supplies.

Brent crude futures settled 39 cents lower at $89.31 a barrel, while West Texas Intermediate (WTI) crude futures fell 13 cents to $83.40. For the week, Brent fell more than five per cent, while WTI declined more than four per cent.

The market has been influenced by comments from Federal Reserve chairman Kevin Warsh pointing to a possible rate hike later this year to contain inflation, according to Phil Flynn, senior analyst at Price Futures Group.