Oil On Track For 9% Weekly Gain As Iran's Leadership Is "Fighting For Its Life"
Key Takeaways
- •Brent settled down 11 cents at $95.52 per barrel while WTI rose 29 cents to $91.30 on Thursday.
- •WTI was headed for its biggest weekly gain since July, up more than 9 percent.
- •Israeli Defence Minister Israel Katz warned Iran that attacks would prompt Israel to cripple its military, civilian, and energy infrastructure.
- •President Trump said he did not expect the U.S. strikes on Iran to continue much longer.
- •Putin said a deal to end the war in Ukraine was possible, which analysts said could ease concerns about Russian fuel supply disruptions.
Oil trading was muted once again on Thursday, as investors took in stride the latest round of U.S. strikes on Iran and Israel's declaration that its primary objective is the toppling of Tehran's Islamic regime.
Brent settled down 11 cents at $95.52 per barrel, while West Texas Intermediate settled up 29 cents at $91.30. Despite these tepid numbers, oil was heading for its biggest weekly gain since July, with WTI up more than 9 percent for the week. The rally underscores how sensitive crude markets remain to any threat to supply from the Middle East, a region that accounts for a substantial share of global oil production and is home to the Strait of Hormuz, one of the world's most important chokepoints for seaborne crude shipments.
Ole Hansen, analyst at Saxo Bank, said the only thing providing forward momentum in Thursday's trading was a warning from Israeli defence minister Israel Katz, who cautioned Iran that it would "cripple" its military and civilian infrastructure, including energy facilities, if Tehran launched attacks against it.
This was accompanied by Israeli prime minister Benjamin Netanyahu, who said of toppling the Islamic regime, "I am convinced of our ability to remove this threat once and for all," adding that the leadership was "weaker than ever" and "fighting for its life."
U.S. president Donald Trump echoed the view of military strategists, saying he did not expect this week's strikes to escalate further: "I don't think it will be very much longer; I don't know how much more they can take."
The comments from Israel support Washington's contention that the strikes on Iran may end soon.
Meanwhile, Russian president Vladimir Putin told delegates at an economic forum on Thursday that there was a chance of reaching an agreement to end the war in Ukraine, and that a peace settlement would be supported by countries including the U.S. and China.
Phil Flynn, senior market analyst at Price Futures Group Inc., said Putin's comments could ease concern about potential Russian fuel supply disruptions. Russia is one of the world's largest oil producers and exporters, so any signal pointing toward a resolution of the war in Ukraine carries weight for global fuel supply expectations alongside the Iran-focused risk premium.
Source: Ship & Bunker
