Brent crude up 5% weekly as Hormuz war premium holds

Brent crude up 5% weekly as Hormuz war premium holds#

Brent crude futures stood at $93.93 a barrel by 6.19 PM UAE time Friday, down 1.66 percent on the day but holding a 5 percent weekly gain. US West Texas Intermediate crude traded at $89.38, down 2.1 percent for the session yet up 7 percent across the week, marking its strongest five-day performance since July 13. October WTI futures reached $91.80 Thursday night, climbing $8.36 or 10.02 percent from the prior week's close. The contract touched a low of $84.11 early in the week before rallying to $93.14, a level not seen since late July.

Early-week selloff fails as transit risk persists#

Markets opened the week testing whether increased cargo movement through the Strait of Hormuz would strip out the conflict premium. That downward pressure reversed. WTI climbed because barrels still in transit face a supply corridor vulnerable to rapid change. Wednesday settlements came in at $95.63 for Brent and $91.01 for WTI, the highest closes since July for both benchmarks. Thursday began with profit-taking that pushed Brent toward $94 and WTI toward $89.50. The retreat lasted only hours. WTI then climbed to $93.14 and Brent touched $97.48 before both contracts pulled back from those peaks.

Hormuz transits remain below average#

Four commodity vessels passed through Hormuz on Thursday, a figure well short of the ten-day average near 15, according to preliminary shipping data. Wednesday saw six transits, down from 11 the previous day. Roughly one-fifth of global oil and liquefied natural gas moved through the strait before the conflict began. Iraq increased August exports to approximately 2.34 million barrels per day from around 1.35 million in July, two Iraqi energy officials reported. Saudi Arabia held its flagship crude price to Asia steady for next month, contrary to market expectations of an increase.

Forecasts raised on supply disruption#

Citi lifted its third-quarter Brent projection to $86 a barrel from $80, citing a slower-than-expected return to normal strait operations. ANZ raised its near-term forecast to $95. Brent has climbed almost 60 percent this year. Ole Hansen, head of commodity strategy at Saxo Bank, noted that energy and agriculture sectors continue drawing support from scarcity and geopolitical disruption, while tight supply conditions underpin industrial metals. US diesel prices hit record highs as supply disruptions accumulated. European fuel inventories sit well below seasonal norms.