Oil Prices Plummet Amid Uncertainty Over US-Iran Ceasefire Deal

Oil prices plummeted nearly 2% on Friday and are on track for their steepest weekly decline since early April, as the market awaits a possible US-Iran ceasefire deal.

The Brent crude benchmark has plunged by about 11% this week, while WTI has dropped by nearly 10%, both registering their biggest weekly losses since April. The sharp decline is attributed to conflicting signals over a potential end to the Iran war and the reopening of the Strait of Hormuz, a crucial waterway for global oil supplies.

While some analysts see a possible deal between the US and Iran as a positive sign, others remain cautious. UBS analyst Giovanni Staunovo noted that 'the price drop could be forcing some market players to close their long positions.' The market focus remains on the possibility of a ceasefire extension, which would have an immediate impact on oil flows through the Strait of Hormuz.

Commerzbank raised its Brent crude price forecasts to $90 a barrel by the end of September and $85 by the end of the year, assuming the Strait of Hormuz remains closed for another two months. However, analysts at ING caution that even with a reopening of the waterway, a recovery in oil prices is uncertain.