On Friday, oil prices declined slightly as markets weighed the likelihood of a ceasefire between the United States and Iran amid the bombing of Saudi Arabia by Houthi rebels and following a week of sharp price increases. Reuters reports, UNN writes.
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As of 02:12 GMT, the price of Brent crude had fallen by 87 cents (or 0.82%) to $105.73 per barrel, while West Texas Intermediate (WTI) crude had declined by $1.56 (or 1.65%) to $93.05 per barrel.
The sluggish start to trading contrasted with a week of high volatility, during which oil prices reached a weekly high on Thursday. Both types of crude rose by 5%: Brent increased by 3.4% by the end of the day, while WTI rose by 2.7%.
For Brent crude, this was the highest closing level since September 15. At the same time, for WTI, it marked the first increase in a long time: it had lost 13% over the previous six sessions and declined by 6.42% for the week (while Brent rose by 2.09% over the same period).
The spread between Brent and WTI prices reached $12.68 — the widest gap since May, when it exceeded $13.
Concerns about a possible U.S. ban on diesel fuel exports, which could lead to an oversupply in the domestic market, largely account for the price divergence, since quotes for these two benchmark crude grades usually move in sync, despite the fact that the U.S. contract typically trades at a discount.
The unusually wide spread between WTI and Brent prices also reflects differences in regional risk factors
Sources close to the negotiations said this week that U.S. and Iranian representatives in New York are considering a phased path out of the conflict, involving Tehran restoring shipping through the Strait of Hormuz and Washington lifting the economic blockade of Iran.
According to industry sources, satellite imagery and maritime shipping data, Saudi Arabia is increasing the volume of crude oil pumped through the East-West pipeline, which leads to the export terminal at the port of Yanbu on the Red Sea coast, although tanker loading has not yet resumed.