Photo caption: Oil
*Oil benchmarks pare gains of as much as 3%
*Brent, WTI on course for falls of more than 7% for the week
Oil prices pared early gains on Friday, a day after renewed fighting near the Strait of Hormuz raised new questions about the ceasefire between the United States and Iran.
Reuters reported that Brent crude futures were up 42 cents, or 0.4%, at $110.48 a barrel by 1214 GMT, having been up as much as 3%. U.S. West Texas Intermediate (WTI) futures were up 33 cents, or 0.4%, at $95.14.
Over the week, both contracts were still set for a decline of about 7%.
U.S. and Iranian forces clashed in the Gulf, and the UAE came under renewed attack as Washington awaited a response from Tehran to its proposal to end the conflict, which began with joint U.S.-Israeli airstrikes across Iran on February 28.
U.S. President Donald Trump later told reporters the ceasefire was still in effect and sought to play down the exchange.
“How quickly can supply be returned from Gulf states, what will the state of inventories be as we approach peak gasoline season, and what sanctions would look like post-settlement are all worthy of thought. But none can be addressed until there is a long-term solution to hostilities,” said PVM Oil Associates analyst John Evans.
“The U.S. administration continues to oversell the prospects of a thaw, and an optimism-biased market buys into it,” Vanda Insights’ said Vandana Hari, founder of oil market analysis firm Vanda Insights.
“Curiously, each time, the rebound is gradual and incomplete, making the head fakes at least somewhat effective.”
Meanwhile, the U.S. Commodity Futures Trading Commission is investigating oil price trades totalling $7 billion placed shortly ahead of key Iran war-related announcements by Trump, Reuters reported on Thursday.
Most involved short positions, or bets on prices falling, placed on the Intercontinental Exchange (ICE) and Chicago Mercantile Exchange (CME) and were placed shortly before Trump statements announcing attack delays, the ceasefire or other changes to Iran policy that led to a decline in oil markets.
