International oil prices fell on Friday but rose by more than 8% this week. Shipping disruptions in the Middle East pushed diesel prices to a record high

International oil prices fell on Friday (11th), but rose by more than 8% this week. (Reuters)

[Financial Channel/Comprehensive Report] International oil prices fell on Friday (11th), but rose by more than 8% this week; at the same time, U.S. diesel prices hit a record high due to attacks along Middle East shipping routes, exacerbating market concerns that supply disruptions may continue.

Brent crude oil futures closed at $104.61 a barrel, down $3.02, or 2.81%.

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U.S. New York West Texas Intermediate crude oil (WTI) closed at $100.05 a barrel, down $2.43, or 2.37%.

Both crude benchmarks hit their highest levels since mid-May, but both turned lower after early gains after the Financial Times reported that Middle Eastern foreign ministers were trying to reach an interim deal with Iran to regulate shipping through the Strait of Hormuz.

Brent crude and WTI both rose more than 6% on Thursday after shipping attacks in the region escalated, but traders reassessed the risks on Friday.

Phil Flynn, senior analyst at Price Futures Group, said: "What caused panic yesterday is easing today, and the question is, will the market remain calm over the weekend? That's when that seems to be happening."

News about the future negotiations in the Strait of Hormuz have the greatest impact on market sentiment.

Giovanni Staunovo, energy analyst at UBS, said: "Some of the headlines surrounding a possible new round of negotiations in the Middle East are putting mild pressure on oil prices today. I continue to see upside risks to oil prices in the short term, but we should also expect price volatility to remain elevated."

Satellite images showed smoke on Thursday near Saudi Arabia's East-West Pipeline, which is critical for the kingdom to reroute crude oil exports away from the Strait of Hormuz. Oil prices continued to slide lower as more reports emerged that a pumping station on the pipeline had been sabotaged by militants linked to Iran.

"It is surprising that the oil market is still down given reports that Houthi rebels have attacked the East-West pipeline, which will affect 7 million barrels of crude oil," said Andrew Lipow, president of Lipow Oil Associates.

Libo added: "Repairing a pump station requires much more work than repairing a ruptured pipeline. The electrical system has to be repaired, and the pumping system also needs to be repaired."

Preliminary ship tracking data released on Friday showed that the number of ships passing through the Strait of Hormuz fell to seven on Thursday, from 11 the day before. Before the Iran war broke out in late February, about 125 commodity ships passed through the strait every day, carrying one-fifth of the world's daily supply of oil and liquefied natural gas.

The average U.S. national diesel price topped $6 a gallon for the first time on Thursday due to oil supply disruptions caused by Iran's war and Ukraine's attacks on Russian refineries, according to price tracker GasBuddy.

Tim Waterer, chief market analyst at KCM Trade, said: "As long as shipping restrictions in the Gulf region and Russian refining capacity disruptions persist, the upward trend in diesel and other refined oil products is likely to be more pronounced than the overall crude oil market."

Commerzbank raised its year-end forecast for Brent crude to $85 a barrel from $75, while raising its forecast for diesel to $1,200 a ton from $950 and its forecast for jet fuel to $1,230 from $980 a ton.

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