Shafaq News

Oil prices fell on Friday after the latest round ofU.S.-Iran fighting as ​traders grew hopeful that shipping would eventuallyresume in the Strait of Hormuz, but prices remained on track to close ‌the weeksharply higher.

Brent futures were down 52 cents, or 0.68%, at $75.78a barrel by 12:35 p.m. CDT (1735 GMT). U.S. West Texas Intermediate crudedropped 83 cents, or 1.15%, to $71.25.

For the week, Brent was set for a gain of about 5.13%and WTI was on track for an increase of about 3.76%.

"This market is ​ready, willing and able to jumpon good news or at least no bad news," said John Kilduff, partner withAgain Capital. "And ​it looks like the escalation won't get anyworse."

With the end of tit-for-tat air strikes and thepromise of ⁠renewed talks between the U.S. and Iran next week, traders lookedforward to the Strait of Hormuz reopening.

"Amazingly though, oil prices are ​coming downafter a spike near $76 a barrel, even as the Strait of Hormuz was effectivelyshut down once again, mainly on confidence that ​the United States' militarystrength will not allow the Strait of Hormuz to be shut down for an extendedperiod of time," said Phil Flynn, senior analyst with Price Futures Group,in a morning note.

Iranian armed forces launched attacks on U.S. militaryinfrastructure in Gulf states on Thursday after U.S. strikes on Iran's southern​coastal and eastern provinces.

Prices pared gains after a Reuters report said Qatarinegotiators were in Iran to meet Iranian officials in an effort to ​de-escalatetensions and create conditions for broader negotiations to continue.

Separately, Iranian media reported multiple explosionsacross southern Iran. The area included Bushehr, where one of the country's ‌nuclear⁠plants is located.

The recent escalation in hostilities between the U.S.and Iran could upend the International Energy Agency's forecast of asignificant oil market surplus next year, the agency said.

The developments have delayed a full reopening of theStrait of Hormuz, which carried about 20% of daily global oil and gas suppliesbefore the start of the war on February 28.

The lack of any new U.S. strikes on Iran overnight isprobably weighing on ​oil prices, though a drop in ​flows through the Strait of⁠Hormuz is limiting the downside, said UBS analyst Giovanni Staunovo.

Liquefied natural gas tankers have passed through thestrait in recent days, ship-tracking data showed, but overall daily traffic hasslowed.

U.S. President Donald Trump said this week that he did​not think the war would restart and that "anything that happens is goingto be over very quickly".

"Despite ​the U.S. ramping up ⁠attacks onmilitary sites in Iran, the market drew some reassurance from the Trumpadministration’s decision to avoid targeting Iranian energyinfrastructure," said ANZ commodity strategist Daniel Hynes.

Elsewhere, the IEA downgraded its projections onRussian oil production because of Ukrainian attacks on the country's energyinfrastructure, the agency said on ⁠Friday.

Russian gasoline output ​fell to a level equivalent toonly around 65% of the seasonal average consumption ​after Ukrainian droneattacks led to stoppages at large oil refineries, according to two industrysources and Reuters calculations.

(Reuters)

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