Oil prices in Friday's trading decreased by about 2% due to increased hopes for a ceasefire between the U.S. and Iran and also speculations about a possible ban on diesel exports by the U.S.
Analysis of Oil Prices in the Global Market
The price of Brent crude futures fell by $2.28, or 2.1%, to $104.32 per barrel. West Texas Intermediate crude also dropped by $2.20, or 2.3%, closing at $92.41 per barrel. However, Brent saw an overall increase of less than 1% this week, while West Texas prices fell by about 8%.
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Concerns Over Security Situation in the Middle East
Traders were worried about the increase in attacks by Ansar Allah forces on Saudi Arabia and the potential disruption to oil supplies from this major producer. Sources close to the negotiations also reported that U.S. and Iranian negotiators in New York are exploring a phased approach to end the war, which may lead to the reopening of the Strait of Hormuz and the lifting of Iran's economic blockade.
Analysts at the consulting firm Ritterbusch and Associates stated in a note: "The oil market is under pressure again as traders continue to assess the possibility of a ban on U.S. diesel exports, while speculations about diplomatic progress for reopening the Strait of Hormuz have fueled today's selling. "
Speculations in Washington about a potential ban on diesel exports have widened the price gap between U.S. oil futures and the global Brent benchmark, indicating that the market expects U.S. refineries to process less crude oil if diesel production remains in the U.S.
According to preliminary ship-tracking data from the company Kepler released on Friday, the amount of crude oil transported through the Strait of Hormuz reached 33.7 million barrels per day in the week ending September 20, which was approximately at the same level as the previous week. Before the start of the Iran war, about 20% of the world's oil supply was transported through the Strait of Hormuz.
Any agreement to reduce trade tensions between the U.S. and China could lead to economic growth and, consequently, increased energy demand.
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