Oil settles lower, posts weekly gains above 5%

Oil prices settled lower on Friday but posted solid weekly gains

Oil prices settled lower on Friday as hopes for easing tensions in the Middle East and continued shipping through the Strait of Hormuz weighed on prices. However, crude posted strong weekly gains following recent military exchanges between the US and Iran.

The daily decline came after the pause in retaliatory strikes over the past few days and reports that negotiations could resume next week, boosting expectations that the Strait of Hormuz will fully reopen to shipping traffic.

Meanwhile, the International Energy Agency (IEA) warned that the recent escalation between the US and Iran could undermine its forecast for a sizeable global oil surplus next year, noting that tensions have delayed the full reopening of the Strait of Hormuz.

Brent crude for September delivery settled down 0.38% at $76.01 a barrel but gained 5.39% for the week.

WTI crude for August delivery fell 0.93% to settle at $71.41 a barrel, ending the week up 3.96%.