Oil prices moved lower in Asian trading on Friday as investors weighed developments on both the geopolitical and macroeconomic fronts. By 21:55 ET (01:55 GMT), Brent futures for July delivery had eased 0.5% to $93.24 per barrel, while West Texas Intermediate crude slipped 0.9% to $88.17 per barrel.
Both benchmarks looked set to finish the week down by almost 10%, marking their steepest weekly drops in months. The retreat followed reports that U.S. and Iranian officials had reached a draft agreement to extend a fragile ceasefire for 60 days while discussions continue over Iran's nuclear program and regional security issues.
That draft deal - which still requires approval from U.S. President Donald Trump - tempered immediate worries about supply disruptions and supported expectations that shipping through the Strait of Hormuz could begin to normalize gradually. Nevertheless, the volume of traffic through the strategic waterway remains well below pre-conflict levels, leaving a geopolitical risk premium still priced into oil markets.
Price moves this week were volatile as markets swung between conflicting headlines about ceasefire talks. Crude temporarily regained ground on Thursday following reports of fresh military exchanges between U.S. and Iranian forces, but those gains dissipated as diplomatic optimism resurfaced.
Alongside the geopolitical developments, investors were also parsing U.S. economic data. Personal consumption expenditures inflation came in higher than expected, a sign that price pressures remain elevated and reinforcing views that the Federal Reserve may keep interest rates higher for an extended period. At the same time, revised U.S. growth figures pointed to softer momentum in the first quarter, adding to concerns about the outlook for global energy demand.
The confluence of potential easing in immediate supply risks, ongoing shipping disruptions relative to pre-conflict norms, and mixed signals on demand helped drive the volatile trade that left both Brent and WTI on course for substantial weekly losses.
Market context:
- Geopolitical headlines about a possible 60-day ceasefire extension between Washington and Tehran reduced near-term supply fears.
- Traffic in the Strait of Hormuz remains subdued compared with pre-conflict levels, maintaining a risk premium.
- U.S. inflation and growth data offered conflicting signals that influenced expectations for demand and monetary policy.