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Oil swings as traders weigh chances of easing in the Iran war

Oil prices moved sharply as traders judged whether the Iran war could ease. Higher fuel costs are already pushing airlines to raise forecasts, which can feed into ticket prices and other costs.

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Photo: ITookSomePhotos, CC BY-SA 4.0, via Wikimedia Commons

Energy ·

Oil prices swung widely this week as traders tried to judge whether tensions in the Iran war might ease. U.S. midterm election results raised hopes of de-escalation, and the market began removing part of the extra price it had added for war risk.

Energy

December West Texas Intermediate (WTI) crude, a U.S. oil benchmark, was on track for one of its steepest weekly drops in months. The price began the week at $102.39 and shed $11.37, a decline of 11.10%. It touched a weekly peak of $102.75 before sliding to $86.65. Early Friday it was around $91.58.

In numbers

  • -11.10%December WTI weekly drop
  • $91.58WTI early Friday
  • $20WTI average rise per barrel

WTI crude, the past month

$90.48up +2.49%

$104.12$88.127 Oct6 Nov

Energy

The drop did not come from weak demand or a surprise rise in inventories. Traders simply cut back the premium that had lifted prices toward their October highs.

In Asia, fuel oil margins and benchmark prices slumped. The refining margin for high-sulfur fuel oil fell to a discount of $2.29 a barrel on Thursday. Hopes of de-escalation could let more oil products leave the Strait of Hormuz, and more oil is already flowing from the Gulf to Asian demand centers.

Not everyone sees a fast deal ahead. Fereidun Fesharaki, chairman emeritus of FGE NexantECA, said an early U.S.-Iran agreement seems unlikely. In his view, Tehran considers President Donald Trump politically weak, and its demands are ones Washington cannot accept.

Costs are still weighing on business. IAG SA raised its fuel bill forecast for this year and said prices would stay high into 2027. Meanwhile, the biggest U.S. shale producers are holding back on drilling, even though WTI averages $20 a barrel more than last year. Diamondback Energy signaled it will not raise activity.

WTI crude$90.48up +2.49%over 1 month
$104.12$88.127 Oct6 Nov

Prices can be delayed by 15 minutes or more. Past moves say nothing about future ones.

Also in this story

Brent crudedown −2.56%1 month

$1,000 in WTI crude

Had you put $ into WTI crude a month ago, it would be worth – now.

From the prices in the chart, before any fees or taxes. Not a suggestion to buy or sell.

WTI price points this week

  • Weekly open102.39 $ a barrel
  • Weekly high102.75 $ a barrel
  • Weekly low86.65 $ a barrel
  • Early Friday91.58 $ a barrel

Figures are for December WTI crude, in dollars a barrel.

Who is who

  • Fereidun FesharakiChairman Emeritus, FGE NexantECA
  • Donald TrumpU.S. President

Background

The Strait of Hormuz is a key shipping route for Gulf oil, so any easing of the conflict could change how much oil reaches markets.

Where
Global
Published
Section
Energy
Markets
WTI crude, Brent crude

This article is not investment advice. It was written by our automated newsroom from published reports and official statements, using only the facts in them, and not read by a person before it was published. Report a mistake
Photo: ITookSomePhotos, CC BY-SA 4.0, via Wikimedia Commons

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