The price of oil rose in morning trade as investors questioned the prospects for a breakthrough in US-Iran peace talks, Reuters reported. However, the quotes are heading for a weekly decline. On a weekly basis, Brent fell 4.6 percent and the U.S. crude lost 7.6 percent, with prices fluctuating sharply on changing expectations around a possible peace deal.
The prices
Brent crude futures, Europe’s benchmark, rose $1.66, or 1.6 percent, to $104.24 a barrel.
U.S. light crude futures rose $1.11, or 1.2 percent, to $97.46 a barrel.
A senior Iranian source told Reuters that differences with the US had narrowed. US Secretary of State Marco Rubio said there were “some positive signals” in the talks, but the countries remained divided over Tehran’s uranium stockpile and control of the Strait of Hormuz.
“Oil prices will only take a sustained downward turn if oil market fundamentals improve substantially, which is likely to drag on until 2027,” said David Oxley, chief commodities economist at Capital Economics.
Six weeks after a fragile truce took effect, efforts to end the war show little progress, while high oil prices fuel concerns about inflation and the outlook for the global economy.
“U.S. light crude is likely to remain in the $90-$110 range next week, as it has largely been since late March,” said Rakuten Securities commodities analyst Satoru Yoshida.
BMI, a division of Fitch Solutions, raised its forecast for the average Brent price in 2026 to $90 a barrel from $81.50. The company cited supply shortages, the time needed to restore damaged energy infrastructure in the Middle East and the six- to eight-week period for normalization after a possible end to the conflict as reasons.
Before the war, about 20 percent of the world’s energy supplies passed through the Strait of Hormuz.
The conflict has taken 14 million barrels of oil out of the market a day, or about 14 percent of global supply, including exports from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.
The full restoration of oil flows through the strait will not happen before the first or second quarter of 2027, even if the conflict ends immediately, the head of the United Arab Emirates’ state oil company Abu Dhabi National Oil Company (ADNOC) said.
Source: Actualno
