Oil prices slip as traders weigh Iran truce talks and Houthi strikes
Crude prices edged lower as markets balanced hopes of a US-Iran truce against continued Houthi attacks on Saudi oil infrastructure.
Oil prices opened slightly lower on Friday as traders weighed the prospect of a truce between the United States and Iran against fresh missile attacks on Saudi Arabia by Yemen's Houthi rebels, following a week of sharp swings.
Brent crude was down 74 cents, or 0.69%, at $105.85 a barrel, while West Texas Intermediate fell 81 cents, or 0.86%, to $93.80 a barrel.
The softer start came after a volatile stretch in which both benchmarks climbed as much as 5% on Thursday. Brent settled 3.4% higher and WTI gained 2.7%, with Brent closing at its highest level since September 15. It was the first advance in days for WTI, which had lost 13% over the previous six sessions and is down 6.42% for the week, against a 2.09% weekly rise for Brent.
Negotiators from the US and Iran meeting in New York are exploring a phased path out of the war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, according to sources close to the talks.
"Diplomatic hopes are essentially helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks," said Tim Waterer, chief analyst at KCM Trade.
Since the war began at the end of February, about a fifth of the world's oil and gas shipments have been curtailed, lifting prices by 50% in March alone and pushing liquefied natural gas buyers to seek new, stable supplies of the super-chilled fuel.
Iranian President Masoud Pezeshkian said on Thursday that the decision to end the conflict rests with Washington. "It's America that must choose whether it wants to end this or not," he said in an interview aired on Fox News.
Saudi Arabia intercepted six ballistic missiles fired by the Iran-backed Houthis, thwarting attacks on the southern province of Taif and the Yanbu area on the Red Sea, the Saudi-led coalition in Yemen said.
Waterer noted that the ongoing attacks "serve as a clear reminder that critical oil assets remain firmly in the firing line."
Saudi Arabia is raising crude pumping volumes through its East-West Pipeline to the Red Sea export hub of Yanbu, though crude tanker loadings have yet to resume, according to industry sources, satellite imagery and shipping data.