Oil prices traded in a narrow range on Friday as investors stepped in to buy after recent declines, while expectations of improving crude supplies continued to prevent a stronger recovery ahead of the U.S. holiday weekend.
Brent crude, the international benchmark, edged up 0.2% to $71.96 a barrel at 05:21 ET (09:21 GMT). U.S. West Texas Intermediate crude was little changed at $68.66 a barrel.
Markets continued to unwind the geopolitical premium built into oil prices during the recent Iran conflict as crude exports from the Gulf recovered. At the same time, weaker-than-expected U.S. employment data reduced expectations that the Federal Reserve would raise interest rates in the near term, while a broadly stable U.S. dollar helped support commodity prices.
Iran negotiations remain a key market driver
Investors remained focused on diplomatic developments between Washington and Tehran after U.S. President Donald Trump said he believed Iran had “agreed to just about everything we need,” suggesting progress in ongoing discussions.
However, The Wall Street Journal reported that Iran has rejected a proposal requiring it to give up its claims over the Strait of Hormuz in exchange for the release of billions of dollars in frozen assets. According to the newspaper, the United States offered financial incentives, including access to frozen Iranian funds, to guarantee unrestricted navigation through the strategic shipping lane, but Tehran has so far declined the proposal.
Although concerns over an immediate interruption to Gulf oil exports have eased, the mixed diplomatic signals continue to keep geopolitical risks firmly on investors’ radar.
Ample supply outlook limits upside
Analysts at ANZ said that growing short positions have weighed heavily on crude futures in recent sessions, although some traders reduced bearish bets before the U.S. holiday.
The bank noted that Brent remains in contango, with near-term futures trading below longer-dated contracts, indicating that markets continue to anticipate abundant short-term supplies. The recovery in tanker movements through the Strait of Hormuz and Saudi Arabia’s exports returning to roughly 90% of pre-conflict levels have reinforced those expectations.
Meanwhile, lower crude prices have encouraged purchases by China’s independent refiners, helped by more competitive pricing from Saudi Arabia and Kuwait. Even so, ANZ said Iran still faces challenges marketing its oil, with more than 58 million barrels held in floating storage and over 90% of those volumes still lacking a confirmed destination, according to Vortexa.
Market participants will continue watching developments in U.S.-Iran negotiations, Gulf export flows and post-holiday demand trends for further direction in crude prices.
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