Brent and WTI crude are on track for their steepest weekly gains since mid-July as escalating US-Iran hostilities and Ukrainian strikes on Russian refineries raise fears of a Middle East supply disruption. Brent traded flat at $95.52 a barrel and WTI climbed to $91.36 on Friday, with Brent up 7.6% and WTI up 10.4% for the week.
Brent crude futures were flat at $95.52 a barrel while WTI crude futures climbed 7 cents, or 0.1%, to $91.36. On a weekly basis, Brent rose 7.6% and WTI gained 10.4%, putting both benchmarks on track for their highest gains since the week ended July 20.
Iran conflict intensifies supply fears
US attacks this week killed and wounded dozens, including Iranian civilians, marking the fiercest clashes between Washington and Tehran since July. The war is now in its seventh month, having begun with US-Israeli strikes in late February. Israeli Defence Minister Israel Katz renewed warnings that Israel would cripple Iran's military and civilian infrastructure, including energy facilities.
Iran also expanded its list of vessels deemed non-compliant and subject to fines, confiscation or detention if they attempt to transit the Strait of Hormuz, though Iraqi ships remain among the few Tehran has cleared to pass. US Vice President JD Vance said Thursday that Washington does not plan to hold talks with Iran unless Tehran stops attacking commercial shipping in the strait.
ANZ lifts its Brent forecast
ANZ analysts raised their Brent crude forecast to $95 a barrel in the short term on Friday, with upside risk if the conflict intensifies further. ANZ analysts said in a note: "The market is entering a delicate adaptation phase." They added that elevated inventories had helped absorb the initial supply shock, but that buffer is diminishing.
Capping the advance, Russian President Vladimir Putin said there remained a path to a deal ending the war in Ukraine, adding that both the United States and China were prepared to support a settlement.
Diesel hits records as Iraq lifts exports
Attacks on Russian refineries by Ukraine, combined with the supply fears from the Iran conflict, pushed average US diesel prices to record highs. Meanwhile, Iraq increased its August oil exports to about 2.34 million barrels per day, up from about 1.35 million bpd in July, according to two Iraqi energy officials. September exports are also expected to rise, as heavy discounts and Iranian approvals for Iraqi tankers encourage buyers.
Technical readings turn overbought
The rally has pushed both benchmarks into stretched technical territory. Brent's Relative Strength Index sits at 68 on the 5-hour chart, just shy of overbought, as the contract tests $97.62 resistance after reaching $95.80. WTI's picture is more extended: its RSI reads 71.17, deep in overbought territory, while the contract trades above its 20-, 50- and 200-period moving averages.
Both contracts remain propped up by the same driver: a Middle East conflict that keeps supply risk elevated even as inventories that once cushioned the market start to thin.
Sources: Investing.com (Reuters), Investing.com, Investing.com
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