Oil Prices Post Largest Weekly Loss After Ceasefire Deal

Brent Crude Oil futures rose 56 cents to $96.48 a barrel on Friday, while West Texas Oil futures increased by 65 cents to reach $98.52. Despite these daily gains, both benchmarks are on track for their most significant weekly losses in ten months, with prices dropping between 11% and 12% over the period. This downward trend followed the announcement of a two-week ceasefire between Iran and the United States, a deal brokered by Pakistan on Tuesday. However, the market remains volatile as localized fighting persists and the flow of energy through the Strait of Hormuz remains severely restricted, keeping futures prices near the $100 threshold. Traffic through the critical waterway is currently estimated at less than 10% of normal volumes as Tehran maintains control over the area. > The Strait of Hormuz remains effectively constrained and operation of the global oil system is far from normal, said Saxo Bank analyst Ole Hansen. Supply risks were further highlighted by reports from Saudi Arabia indicating that attacks on energy facilities have reduced the kingdom's production capacity by approximately 600,000 barrels per day and cut East-West Pipeline throughput by 700,000 barrels per day. The broader impact of the conflict, which began on February 28 when the U.S. and Israel launched airstrikes, has been extensive. Data from JPMORGAN CHASE & CO suggests that nearly 50 infrastructure assets in the Gulf have been damaged by drone and missile strikes, removing roughly 2.4 million barrels per day of refining capacity from the global market. Prices pared some gains late Friday after Lebanon announced its intention to join upcoming meetings in Washington to discuss a ceasefire in the parallel conflict involving Hezbollah.