Kuwaiti crude drops $8.38 to $94.01
The price of a barrel of Kuwaiti crude oil fell by $8.38 to reach $94.01 per barrel in yesterday’s trading, down from $102.39 on Thursday, according to the price announced by the Kuwait Petroleum Corporation.
In global markets, oil prices fell at settlement on Friday but maintained their trajectory toward strong weekly gains, after geopolitical tensions in the Middle East had supported prices throughout the week, before coming under pressure following a report that China had begun efforts to resume stalled peace talks between the United States and Iran.
Brent and West Texas Intermediate (WTI) crude oils rose over the week amid missile exchanges between the United States and Iran, a decline in shipping traffic through the Strait of Hormuz, and Houthi attacks in Yemen on ships in the Red Sea.
Brent crude futures fell at settlement by $3.91, or 3.88 percent, to $96.78 per barrel, after surpassing the $100 level during the previous session for the first time since May, although they recorded weekly gains of nearly 10 percent.
US West Texas Intermediate crude futures also fell in Friday’s session by $2.88, or 3.12 percent, to $89.31 per barrel, while recording weekly gains of 8.27 percent.
John Kilduff, a partner at Again Capital, said that any signs of a potential political settlement were quickly welcomed in oil markets, adding that investors do not wish to assume that escalation will continue without a prospect of a resolution.
The decline came after sources reported that China launched a move to resume peace talks between the United States and Iran, at a time when US President Donald Trump threatened Iran and the Houthis with “harsh military punishment” following attacks on oil tankers in the Red Sea.
Preliminary data from ship-tracking company Kpler showed that the average number of ships transiting the Strait of Hormuz was three per day over the past three days, while the number of ships transiting the Bab al-Mandab Strait rose to 32 on Thursday, compared to 26 the previous day.
Giovanni Stonifu, an analyst at UBS, said that ship traffic continues through the sea routes, indicating that the situation does not amount to a full blockade, as markets had feared.
Analysts at JPMorgan noted that each additional month of oil supply disruption could add between $7 and $8 to the price of a barrel of Brent crude, potentially raising average monthly prices to around $114 if the disruption lasts for three months.
In another development, Russia said its forces targeted three Ukrainian ports and infrastructure, including loading and unloading facilities and fuel reserves supporting the Ukrainian army, during the night. Meanwhile, Kazakhstan’s Ministry of Energy announced that oil companies had temporarily cut production after the closure of its main Black Sea export terminal following attacks suspected to be Ukrainian.
