Oil swung on Friday as investors sought to balance a mix of escalatory and deescalatory headlines.
Futures on Brent crude (BZ=F), the international pricing benchmark, and US benchmark West Texas Intermediate (WTI) crude (CL=F) both traded roughly 2% above their levels at 12 a.m. ET, to hold around $104 and $95 per barrel, respectively. Both products had surged earlier in the session before giving back those gains as investors played both sides of the trade.
In separate press conferences on Thursday, President Trump and Israeli Prime Minister Benjamin Netanyahu said that the US and Israel would halt any targeting of Iranian energy infrastructure after strikes by Israel on Iran’s South Pars gas field set off a wave of retaliatory attacks from the regime.
At the same time, Iran’s strikes against critical energy facilities throughout the Gulf have only continued.
Attacks on Qatar’s Ras Laffan LNG export terminal — the largest such terminal in the world — earlier in the week caused “extensive damage” and took roughly 17% of Qatar’s LNG capacity offline, QatarEnergy CEO Saad al-Kaabi told Reuters on Wednesday. The damage may force QatarEnergy to declare force majeure on shipments five years out, al-Kaabi said.
Though the paper market has held somewhat flat over the past few days, with Brent and WTI both within 1% of their Sunday opening prices, the cost of physical barrels has soared. Prices on barrels of Dubai and Oman crude oil for prompt delivery were trading at $158.85 per barrel, according to Bloomberg data, a roughly $50 premium over Brent futures.