Oil prices ease as US-Iran truce hopes counter Saudi supply risk
USO•Oil prices fell about 1% as markets weighed the possibility of a US-Iran truce against risks to Saudi supply from Houthi attacks. Brent was down 1.1% at $105.46 a barrel, while WTI fell 1.1% to $93.56.
1. Prices fall on truce hopes
Brent futures fell $1.14, or 1.1%, to $105.46 a barrel by 10:03 a.m. EDT on Friday. WTI crude fell $1.05, also 1.1%, to $93.56. Brent was up about 2% for the week, while WTI was down about 7%.
2. Talks and supply risks
US and Iranian negotiators are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, sources close to the talks said. Meanwhile, Saudi, Turkish and Pakistani military chiefs are set to discuss support for Saudi Arabia as it faces Houthi attacks.
3. Hormuz flows and refining
Crude flows through the Strait of Hormuz reached 33.7 million barrels so far in the week starting September 20, preliminary Kpler ship-tracking data showed, roughly on track with the previous week. Talk of a possible US diesel export ban has widened the Brent premium over WTI to its highest since May, as markets expect US refiners may process less crude if diesel output remains at home.
