Global oil prices showed little movement on Friday after a steep drop in the previous session, as traders weighed ongoing tensions in the Middle East against hopes for a diplomatic breakthrough.
Brent crude slipped 21 cents to $95.24 a barrel in early trading, while US West Texas Intermediate (WTI) crude edged down 10 cents to $92.94 a barrel. The modest declines followed much larger losses on Thursday, when both benchmarks fell by around 3 percent.
Despite the latest pullback, oil remains on course for its first weekly gain in three weeks. The recent rise reflects growing concerns that the conflict involving the US, Israel and Iran could threaten global energy supplies at a time when inventories are already under pressure.
For consumers around the world, sustained increases in oil prices often translate into higher transport costs, more expensive goods and greater pressure on fuel bills. Countries that rely heavily on imported energy are particularly vulnerable to prolonged market volatility.
Investors had been watching for signs of progress towards a ceasefire in the region. However, hopes of a quick breakthrough weakened after Hezbollah leader Naim Qassem rejected a US-backed proposal aimed at ending hostilities in Lebanon. Iran has linked any wider peace agreement with Washington to a ceasefire in Lebanon.
US President Donald Trump said progress was being made and expressed hope that peace could eventually be achieved. Even so, market participants remain cautious.
Analysts say uncertainty continues to dominate sentiment. Tony Sycamore of IG noted that optimism is still being overshadowed by conflicting developments and rapidly changing headlines from the region.
Supply concerns remain a key support for prices. Traffic through the Strait of Hormuz, one of the world’s most important oil shipping routes, remains restricted. At the same time, Iranian oil exports have fallen to their lowest level in six years, largely due to a US naval blockade.
Meanwhile, OPEC has maintained its forecast for global oil demand growth this year, signalling confidence that consumption will remain resilient despite geopolitical tensions and disruptions to supply routes.
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