Brent heads for weekly gain as Houthi attacks raise Saudi supply concerns

Brent crude was heading for a weekly gain despite retreating from Thursday’s close, as concerns over Middle Eastern supply continued to support prices, OilPrice.com reported. Reports of a possible agreement between the United States and Iran had not dispelled those concerns, with the security of Saudi oil exports remaining in focus following attacks by Yemen’s Houthis.

At the time of the report, Brent was trading at $105.65 a barrel, compared with roughly $102 on Monday. West Texas Intermediate was moving towards a weekly loss, however, standing at $93.11 a barrel against about $98 at the start of the week. Both benchmarks had eased from their Thursday closing levels, leaving their weekly performances on divergent paths.

OilPrice.com attributed substantial price support during the week to escalating Houthi attacks on Saudi Arabia. The group said on Thursday that it had launched missiles and drones against Saudi targets, including the Red Sea port of Yanbu. The outlet described Yanbu as Saudi Arabia’s principal oil export terminal, placing the port at the centre of concerns over the security of the country’s outward shipments.

Meanwhile, the United States and Iran were reportedly discussing a ceasefire arrangement involving the reopening of the Strait of Hormuz by Iran in return for Washington ending its naval blockade of the country. OilPrice.com cited Reuters reporting of remarks by Iranian president Masoud Pezeshkian on Thursday that placed responsibility on the United States to decide whether to bring the confrontation to an end.

Analysts cited in the report remained cautious about the prospects for lower prices. Sparta Commodities senior oil market analyst June Goh told Al Jazeera that oil was likely to stay above $100 a barrel while the global inventory shortfall widened without a clear resolution. KCM Trade chief market analyst Tim Waterer said diplomatic activity around the UN was offering some restraint on prices, but that upward pressure would persist until there was stronger evidence of lasting de-escalation.