Oil markets suffered another sharp leg lower this week, with one benchmark down 32% from its $136 peak as the International Energy Agency projected a global supply surplus despite ongoing hostilities involving Iran. Brent crude settled Friday at $95.84, up just 2 cents, while WTI finished at $88.56, down 0.2 percent.
The weekly picture was firmly bearish. Brent lost about 2.5 percent from the previous Friday's $98.32 settlement, marking a second consecutive weekly decline after a roughly 16 percent fall the week before. Tuesday's $91.49 settlement was the lowest since August, and Brent remains about 20 percent below its late-October high near $118.
Thursday brought a brief spike of 3.3 percent after the Houthis claimed attacks on Saudi oil sites and Iran reported explosions on four tankers in the Strait of Hormuz. However, the market held that risk premium but did not extend it on Friday. Reuters attributed the weekly decline to signs of a growing supply surplus, higher OPEC+ output led by Saudi Arabia, rising US crude and fuel inventories, and the US blockade of Iranian oil, which reduced fears of a renewed direct conflict.
Diesel shortages persist even as crude prices collapse, adding a layer of divergence in refined products. For the week ahead, traders are watching three main drivers: progress on a Qatari-brokered Iranian proposal to reopen Hormuz, confirmation or denial of damage to Saudi Arabia's East-West pipeline and Yanbu export infrastructure, and the US Energy Information Administration's weekly inventory report. Reference levels sit at $98 on the upside and $91 on the downside.
US producer price data for October contributed to the caution, as recent hot inflation readings have put a December Federal Reserve rate increase into futures pricing. Higher rates and a firmer dollar tend to weigh on oil and other risk assets, making the macro backdrop mixed for digital assets even as lower energy prices could eventually ease inflation pressures.
