Oil prices fall as markets look to Iran truce, but remain wary of attacks on oil facilities

[PERTH] Oil prices fell slightly on Friday (Sep 25) as markets weighed the possibility of a truce between the US and Iran against the bombing of Saudi Arabia by Houthi rebels after a week of price spikes.

Brent was down 74 cents, or 0.69 per cent, to US$105.85 a barrel at 0032 GMT, while West Texas Intermediate (WTI) was down 81 cents, or 0.86 per cent, at US$93.80 a barrel.

The sluggish opening was a contrast to a week of volatility when oil prices rose to a one-week high on Thursday. Both contracts rose as much as 5 per cent. Brent settled up 3.4 per cent and WTI was 2.7 per cent higher.

Brent notched its highest close since Sep 15. It was the first rise in days for WTI, which was down 13 per cent over the prior six sessions and is down 6.42 per cent for the week, compared with Brent’s 2.09 per cent rise.

US and Iranian negotiators in New York are exploring a phased path out of war that would involve Teheran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, sources close to the talks said this week.

“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, around a fifth of the world’s oil and gas shipments have been curtailed, pushing up prices by 50 per cent in March alone while driving liquefied natural gas buyers to look further afield for new, stable supplies of the super-chilled fuel.

On Thursday, Iranian President Masoud Pezeshkian said it was up to the US to choose when the Iran war will end.

“It’s America that must choose whether it wants to end this or not,” Pezeshkian said, responding to a question in an interview aired on Thursday on Fox News.

SEE ALSO

Saudi Arabia says it intercepts six Houthi missiles targeting cities including Yanbu oil hub

Saudi Arabia sells nearly 100 million barrels of oil to Asia, easing looming supply crunch

US Energy Secretary Wright says diesel export ban won’t work

Oil extends gains on little sign of progress in US-Iran talks

More

Saudi Arabia intercepted six ballistic missiles fired by Yemen’s 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.

Ongoing attacks “serve as a clear reminder that critical oil assets remain firmly in the firing line,” Waterer said.

Saudi Arabia is building up crude pumping volumes through its East-West Pipeline that runs to its Red Sea export hub of Yanbu, although crude tanker loadings have yet to resume, according to industry sources, satellite imagery and shipping data. REUTERS