U.S. crude futures fell more than 1% on Friday after reports that Qatar told Iran not to attack Israel while ceasefire negotiations in Gaza are ongoing.
Qatar’s prime minister told Iran’s leaders in a phone call after the first day of Gaza ceasefire talks in Doha on Thursday that they should de-escalate and warned of the consequences of attacking Israel if talks made progress, two diplomats told The Washington Post.
U.S. benchmark crude oil edged down 0.25% this week, while Brent crude edged up 0.03%.
Here are Friday’s closing energy prices:
- West Texas Intermediate Oil September contract: US$76.65 per barrel, down US$1.51, or 1.93%. U.S. crude oil has gained 6.98% so far this year.
- Brent September contract: US$79.68 per barrel, down US$1.36, or 1.68%. Year to date, the global benchmark is ahead by 3.43%.
- RBOB gasoline September contract: $2.31 per gallon, down more than 4 cents, or 2.03%. So far this year, gasoline prices are up 9.87%.
- natural gas September contract: $2.12 per thousand cubic feet, down 7 cents, or 3.37%. Natural gas prices are down 15.5% so far this year.
ceasefire negotiations are pause On Friday, talks were expected to resume next week. Hamas did not participate in the talks but was briefed by the mediator. A senior official of the militant group told Reuters that Israel “has not adhered to the agreement reached in an earlier round of negotiations.”
Daniel Ghali, senior commodities strategist at TD Securities, said risk premiums appeared to be “leaking out of energy markets again, suggesting traders were curiously ignoring the risk of geopolitical aggression heading into the weekend.”
U.S. benchmark indexes rose more than 4% on Monday on concerns that Iran is getting closer to attack Israel. Iran has vowed to retaliate for the assassination of a Hamas leader in Tehran in late July.
The price subsequently fell back as the attack had not yet occurred. Concerns about weak oil demand from China also weighed on the market, with OPEC lowering its forecast for 2024.
Phil Flynn, senior market analyst at Price Futures Group, said the market appears to be “convinced that global demand growth may not be as strong as some initially thought.”
“The pendulum of price influence continues to swing between fundamentals and geopolitics, and today’s sell-off appears to be dictated by Middle East negotiations and Iran’s continued lack of retaliation,” said Matt Smith, chief oil analyst for the Americas at Kpler.
