Oil set for steepest weekly loss since June

Concerns rise over Saudi Arabia supply disruptions, limited flows through Hormuz

NEW YORK:

Oil prices rose towards $100 a barrel on concerns over Saudi Arabia supply disruptions and limited flows through the Strait of Hormuz, but were still on track for their biggest weekly fall since last June as a fragile ceasefire held.

Brent crude futures were up 40 cents, or 0.4%, at $96.32 a barrel at 1520 GMT. West Texas Intermediate futures were up 84 cents, or around 0.9%, at $98.71.

Both contracts have lost about 12% this week after Iran and the US agreed on Tuesday to a two-week ceasefire brokered by Pakistan.

However, fighting has continued and the flow of oil through the Strait of Hormuz remains heavily restricted, keeping futures near $100 a barrel and pushing prices in the physical market to record highs.

"The key issue for the oil market is whether ship traffic through the Strait of Hormuz will resume. So far, there are no signs of this happening. If oil supplies from the Persian Gulf remain blocked, oil prices are likely to rise again," Commerzbank analysts said in a note on Friday.

Iran wants to charge fees for ships to pass through the strait under a peace deal, a Tehran official told Reuters on April 7. Western leaders and the United Nations' shipping agency have pushed back on the idea. Middle East producers shut in about 7.5 million barrels-per-day (bpd) of crude oil production in March as storage capacity tightened, with outages projected to rise to 9.1 million bpd in April, the Energy Information Administration, said in a report earlier this week.

Still, producers in the Middle East have asked Asian refiners to submit crude oil loading programmes for April and May in preparation for the eventual resumption of shipping through the Strait of Hormuz, three sources with knowledge of the matter said.