Oil Prices Slide as Fed Policy Hints and Hormuz Rumors Weigh

Oil prices fell on Friday as traders evaluated hints about the U.S. Federal Reserve Bank's inflation-fighting policy and rumors of a possible agreement on shipping through the Strait of Hormuz.

Brent crude futures were down $0.38 or 0.42% at $89.32 a barrel, while West Texas Intermediate crude futures fell $0.36 or 0.43% to $83.17. Both benchmarks were poised to end the week lower, with Brent down around 5.38% and WTI falling 4.47%, according to Reuters.

The decline in oil prices followed comments by new Fed Chairman Kevin Warsh pointing to a possible rate hike later this year to curb inflation. Senior analyst Phil Flynn of the Price Futures Group stated that the global products markets are looking strong on further Ukraine strikes on Russian refineries, but rumors of a deal to reopen the Strait of Hormuz over the weekend are also causing market uncertainty.

Traders were watching increasing flows of oil through the strait, which accounts for 20% of global oil production. Analyst Janiv Shah of Rystad noted that the market has been surprised by additional flow through the Iran-Oman shipping corridor and U.S. mine clearance claims. This week, the U.S. announced what it called 'the toughest sanctions in history' on Iran.