Oil prices edged higher on Friday but were still set for a weekly drop, as traders remained unconvinced that US-Iran talks would lead to a lasting breakthrough.
Brent crude futures rose $1.66, or 1.6 percent, to $104.24 a barrel by 0405 GMT. US West Texas Intermediate (WTI) climbed $1.11, or 1.2 percent, to $97.46.
Despite the Friday gains, both benchmarks were under pressure over the week. Brent fell 4.6 percent, while WTI slipped 7.6 percent, reflecting sharp swings in sentiment as hopes for progress in peace talks rose and faded.
Diplomatic signals remained mixed. A senior Iranian source said gaps with Washington had narrowed, while US Secretary of State Marco Rubio pointed to “some good signs” in discussions. However, key issues remain unresolved, including Tehran’s uranium stockpile and the security of the Strait of Hormuz, a vital global shipping route.
Market analysts say prices are likely to stay range-bound unless there is a clear improvement in supply conditions. David Oxley, chief commodities economist at Capital Economics, said oil would only move lower in a sustained way if fundamentals improved, something he expects to take time.
Six weeks after a fragile ceasefire, efforts to secure a broader settlement have made limited progress. Higher oil prices have also added to concerns about inflation and the global growth outlook.
Satoru Yoshida, a commodity analyst at Rakuten Securities, said WTI could continue trading between $90 and $110 in the near term, a range it has mostly held since late March.
BMI, a unit of Fitch Solutions, has raised its 2026 Brent forecast to $90 from $81.50, citing ongoing supply tightness, delays in repairing energy infrastructure in the Middle East, and a recovery period that could stretch for weeks after any conflict easing.
The Strait of Hormuz remains central to the outlook. Roughly one-fifth of global energy shipments pass through the route, and disruption linked to the conflict has taken an estimated 14 million barrels per day of oil supply out of the market, according to industry figures. That includes exports from Saudi Arabia, Iraq, the UAE and Kuwait.
Even if tensions were to ease now, full flows through the strait are unlikely to return before early or mid-2027, the head of the UAE’s state oil firm ADNOC has said.
In the background, OPEC+ producers are expected to consider a small increase in output when they meet on June 7, according to multiple sources. However, actual supply changes remain uneven as some members continue to face disruption linked to the ongoing tensions.
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