Crude oil markets remained relatively stable Friday morning after experiencing substantial losses during the prior trading session, as the likelihood of a swift resolution to the ongoing U.S.-Iranian conflict appeared to decrease following Hezbollah’s dismissal of a proposed ceasefire agreement in Lebanon.
Brent crude futures dropped 21 cents, representing a 0.22% decline to $95.24 per barrel by 0003 GMT, coming after a 2.84% decrease in the previous trading period.
West Texas Intermediate crude traded at $92.94 per barrel, falling 10 cents or 0.11%, after experiencing a 3.1% decline on Thursday.
Despite the recent drops, both oil contracts appear positioned to record their first weekly increases in three weeks, with WTI climbing more than 6%. This rise followed escalated Middle Eastern hostilities as peace negotiations between the U.S. and Iran continued without resolution, while shipping through the Strait of Hormuz – a critical passage for one-fifth of global oil supplies – remained restricted.
Market experts have raised alarms about declining worldwide oil stockpiles that could trigger significant price increases during the third quarter.
On Thursday, Hezbollah leader Naim Qassem turned down a U.S.-facilitated arrangement between Israel and Lebanon’s government aimed at ending hostilities. Tehran has established a Lebanese ceasefire as a prerequisite for any peace agreement with Washington.
The president stated Thursday that he saw advancement occurring between Israel and Lebanon, expressing his belief that Lebanon should experience peace.
“Any optimism remains heavily clouded by a tangled web of headlines and counter-headlines,” IG market analyst Tony Sycamore said in a note.
“From a technical perspective, as long as (WTI) crude oil remains above trendline support in the low $80s, the risks remain skewed to the upside.”
OPEC maintains its projection for oil demand growth of 1.2 million barrels daily this year, Secretary General Haitham Al Ghais announced Thursday, despite ongoing Middle Eastern tensions and the Strait of Hormuz restrictions.
According to maritime data, Iranian oil shipments have reached their lowest point in six years, primarily attributed to the U.S. naval blockade, though reduced Chinese demand has kept prices for that oil suppressed.
