Oil Prices Slide as Truce Hopes Offset Ongoing Mideast Tensions
Oil prices dipped on Friday as markets considered the potential for a truce between the US and Iran, but remained cautious about ongoing attacks on oil facilities. The Brent crude contract fell by $1.74 or 0.69% to $105.85 per barrel at 0032 GMT, while West Texas Intermediate (WTI) dropped by $1.81 or 0.86% to $93.80 a barrel.
The price decline was a contrast to the previous week's volatility, when oil prices had surged to a one-week high on Thursday. Brent rose by as much as 5% and settled up 3.4%, while WTI increased by 2.7%. However, US and Iranian negotiators in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.
Tim Waterer, chief analyst at KCM Trade, noted that diplomatic hopes were helping oil prices weather the latest military strikes in the Middle East. He said: 'Diplomatic hopes are essentially helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks.'
Saudi Arabia intercepted six ballistic missiles fired by Yemen's Iran-backed Houthis on Thursday, thwarting attacks on the southern province of Taif and the Yanbu area on the Red Sea. Waterer warned: 'Ongoing attacks serve as a clear reminder that critical oil assets remain firmly in the firing line.'