Oil Prices Poised to Close Week Above $100 Amid Regional Disruptions
Oil prices are on track to close the week above $100 for the first time in nearly four months, despite a decline on Friday. Brent crude futures settled at $104.61 a barrel, down $3.02 or 2.81%, while U.S. West Texas Intermediate (WTI) finished at $100.05 a barrel, down $2.43 or 2.37%. The prices had hit their highest levels since mid-May earlier in the session.
The decline on Friday was attributed to a report from the Financial Times that foreign ministers in the Middle East are working out a temporary deal with Iran to manage shipping through the Strait of Hormuz. This news weighed moderately on oil prices, said UBS energy analyst Giovanni Staunovo.
The supply disruptions and attacks in the region continue to be a major concern for the market. Satellite imagery showed smoke near Saudi Arabia's East-West Pipeline, which is vital for the kingdom to divert its crude exports away from Hormuz. The pipeline had been damaged by Iran-affiliated militants, which would impact 7 million barrels of crude.
The U.S. national average diesel price surpassed $6 a gallon for the first time on Thursday due to supply disruptions caused by the Iran war and Ukrainian attacks on Russia's refineries. Commerzbank raised its year-end Brent crude forecast to $85 a barrel from $75, while increasing its diesel forecast to $1,200 a ton from $950.