As Strait of Hormuz Opens, Oil Falls
Crude prices plunged by more than 3% on Friday, on course for steep weekly losses, on easing supply concerns as more stranded oil tankers exited the Strait of Hormuz, even though a cargo vessel was hit near Oman on Thursday.
Brent crude futures fell $2.61, or 3.47%, to $72.65 a barrel by 1037 GMT. U.S. West Texas Intermediate lost $2.46, or 3.42%, to $69.46.
The Brent benchmark was heading for a weekly decline of about 9.8% while WTI was trading around 9.3% lower than its close last Thursday before the market closed for a public holiday last Friday.
"The predominant view, it appears, remains one of imminent oversupply," said PVM analyst Tamas Varga.
Refining giant Saudi Aramco resumed oil loading on Friday at its Ras Tanura terminal in the Gulf after close to a four-month halt, shipping data from LSEG showed.
Two Very Large Crude Carriers, which can load cargoes of 2 million barrels, were seen loading crude at the terminal while another waited nearby, the data showed.
"There is a general selloff as the market reacts to the increased flows exiting the Strait of Hormuz and China not yet picking up crude demand," said June Goh, senior oil market analyst at Sparta Commodities.
Both benchmark contracts jumped more than 2% on Thursday after a cargo vessel was hit by an unknown projectile near Oman, prompting the U.N.'s shipping agency to suspend its voluntary evacuation scheme.
Two U.S. officials told Reuters that Iran fired on the cargo ship as it attempted to pass through the strait. Iranian authorities said the security of vessels passing outside designated Hormuz routes is not guaranteed.
Data on Thursday showed that crude shipments through the Strait of Hormuz rose this week to their highest since the U.S.-Israeli conflict with Iran began in February, buoyed by a ceasefire deal that reopened the waterway, though overall traffic remains a fraction of the pre-war daily average.
"If the number of transits does not increase more strongly next week either, scepticism in the market is likely to grow, so that the oil price is likely to rise again," Commerzbank analysts said on Friday.
Meanwhile, Russian authorities are considering a diesel export ban for several months, state news agency TASS said on Friday.
Russia is a major diesel exporter but is facing fuel supply issues after a wave of Ukrainian drone attacks on its oil refineries and other energy infrastructure.
(Reuters)
