Oil prices experienced a modest uptick in Asian trading on Friday, supported by indicators of steady demand in the United States. Yet, both Brent and West Texas Intermediate (WTI) benchmarks are still set to close the week with substantial losses, reflecting diminished worries about supply disruptions in the Middle East.
By 21:10 ET (01:10 GMT), August Brent crude futures had increased by 0.5%, reaching $68.07 per barrel, while WTI rose by the same margin to $65.57 per barrel.
This recent price boost was partly driven by a notable decline in U.S. crude inventories, signaling strong domestic consumption. Positive sentiment was further bolstered by hopes for potential economic stimulus in China, the largest consumer of oil globally.
Additionally, the U.S. dollar’s recent slide to a three-year low has helped lift oil prices, as investors anticipate the Federal Reserve may ease monetary policy. Market participants are now awaiting fresh inflation figures from the PCE price index due later Friday, which could influence the Fed’s policy direction.
Weekly Losses Exceed 12% Amid Reduced Geopolitical Concerns
Despite the modest gains on Friday, both Brent and WTI futures have plunged over 12% this week. The sell-off followed U.S. President Donald Trump’s announcement of a ceasefire deal between Israel and Iran, which alleviated fears of oil supply interruptions in the geopolitically sensitive region.
Though initially uncertain, the ceasefire appeared to hold firm by Friday morning. Trump also mentioned that Iran might continue selling crude to China—an added bearish factor—and referenced upcoming nuclear talks scheduled with Tehran next week.
Importantly, Iran chose not to close the Strait of Hormuz, a vital maritime chokepoint for global oil shipments, ensuring steady flow to key Asian and European markets.
Observers are now closely monitoring the aftermath of recent U.S. military strikes against Iran’s nuclear sites. Early assessments suggest these actions did not completely disable Iran’s nuclear capabilities, although the White House has contested these reports.
No Immediate Plans to Refill U.S. Strategic Petroleum Reserve
Adding downward pressure on prices, the Trump administration confirmed it has no immediate plans to replenish the U.S. Strategic Petroleum Reserve (SPR). The reserve is currently at its lowest level since the 1980s, following large releases made under the Biden administration aimed at easing fuel prices amid the Russia-Ukraine conflict.
With diminished emergency stockpiles, the U.S. has less capacity to respond quickly to sudden supply disruptions or price spikes.
Still, Trump has pushed for increasing domestic oil production as a way to reduce dependence on reserves and bolster energy security.