Solid Gold Berjangka – Oil prices retreated during Friday’s trading session after an earlier rally, fueled by growing optimism that the conflict involving Iran might de-escalate. Brent crude traded below US$97 per barrel following a conversation between the Emir of Qatar, Sheikh Tamim bin Hamad Al-Thani, and U.S. President Donald Trump regarding efforts to ease tensions in the Middle East.
Diplomatic developments exerted immediate downward pressure on prices, which had previously been clouded by concerns over potential supply disruptions. Since the start of trading on Thursday, Brent had surged by 6.6%; however, volatility remained high, with prices swinging within a range of approximately US$19 since the beginning of the week.
On a weekly basis, front-month oil futures have fallen by nearly 18%, putting them on track for their largest decline since April 2020. The Democratic Party's victory in the U.S. midterm elections has also bolstered expectations that Washington may be more inclined to seek a swift resolution to the conflict.
Additional pressure on oil prices has stemmed from a strengthening U.S. dollar and the recovery of oil exports from the Persian Gulf region. Supplies from Saudi Arabia and the United Arab Emirates are nearing pre-war levels, and competition for market share has intensified following Riyadh’s decision to lower oil prices for Asian buyers.
Nevertheless, the risk of a price rebound has not entirely vanished. Attacks on vessels in the Strait of Hormuz persist, exports of petroleum products from the Gulf region remain constrained, and Ukrainian strikes on Russian refineries continue. The market is now awaiting President Trump’s next move—whether he will opt for new military action, increased economic pressure, or a negotiated settlement with Iran. (srh)