Oil prices retreated as hopes for a ceasefire overshadowed concerns regarding Houthi attacks
While markets weighed the possibility of a ceasefire between the US and Iran, they also considered concerns that Houthi rebels could disrupt supplies from the Middle East; this dynamic caused oil prices to fall on Friday.
Brent crude fell $1.47 (or 1.4%) to $105.11 per barrel at 08:41 T.S time (05:41 GMT), while WTI crude dropped $2 (or 2.1%) to $92.61 per barrel.
Diplomatic hopes are helping oil prices weather Middle East conflicts relatively well; despite the attacks, crude oil prices are maintaining a moderate trend. Since the war began in late February, approximately one-fifth of global oil and gas shipments have been disrupted.
The price spread between Brent and WTI has reached its widest level since May. Supply issues in the Gulf region are reportedly keeping premiums on Brent crude high.
On Thursday, oil prices had hit one-week highs, with both benchmarks recording gains of up to 5%. On a weekly basis, Brent gained 1.7% in value, while WTI lost 7.2%.
The price gap between Brent and WTI reached $12.50 per barrel, the widest margin seen since May. Although WTI typically trades at a lower price, the two benchmarks generally move in tandem. However, this time, fears that the US might impose a diesel export ban, potentially leading to a domestic supply surplus, are playing a major role in the price divergence.
The widening Brent-WTI price spread reflects a growing divergence between global supply risks and US market dynamics.
While supply constraints in the Gulf region have led to a significant geopolitical risk premium for Brent crude, high production and inventory levels in the US are causing WTI crude to trade at a significantly lower price than Brent.
According to industry sources, satellite imagery, and shipping data, Saudi Arabia is increasing the volume of crude oil pumped through the East-West Pipeline to Yanbu, its export hub on the Red Sea, even though loading operations onto crude oil tankers have not yet resumed.
Related Articles
According to sources, U.S. and Iranian negotiators are working on a phased approach to end the conflict
Responses to peace proposals are being evaluated; oil prices have fallen amid diplomatic overtures
Oil prices continued to fall on Wednesday as supply in the Gulf region improved
