Oil Prices Fall as Truce Hopes Offset Middle East Tensions
Oil prices fell on Friday as markets weighed the possibility of a truce between the US and Iran against the ongoing attacks on oil facilities in Saudi Arabia. Brent crude was down 74 cents, or 0.69%, to $105.85 a barrel at 0032 GMT, while West Texas Intermediate (WTI) was down 81 cents, or 0.86%, at $93.80 a barrel.
The drop came after a week of volatility that saw oil prices rise to a one-week high on Thursday. Both contracts rose as much as 5% last week, with Brent settling up 3.4% and WTI 2.7% higher. However, since the war began in February, around a fifth of the world's oil and gas shipments have been curtailed, pushing up prices by 50% in March alone.
US and Iranian negotiators are exploring a phased path out of war that would involve Teheran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran. According to Tim Waterer, chief analyst at KCM Trade, diplomatic hopes are helping oil prices weather the latest military strikes in the Middle East.