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US Oil Update: Crude Futures Drop Early Friday After Mostly Gains Throughout Week

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Global oil benchmarks eased on Friday, but remained firmly on track to lock in net weekly gains, effectively snapping a consecutive two weeks of losses.

Front-month West Texas Intermediate crude futures fell by about 1% to $92.18 per barrel, while Brent futures were down 0.6% to $94.47/bbl.

"While there are few signs of progress in US-Iran talks, the oil market continues to trade on expectations of an imminent deal that would resume flows through the Strait of Hormuz. This seems overly optimistic as Hezbollah rejects the Lebanon-Israel ceasefire," ING analysts said.

While a tentative, US-mediated Israel-Lebanon ceasefire initially cooled front-month risk premiums, structural de-escalation between Washington and Tehran has stalled.

However, Lebanese Parliament Speaker Nabih Berri officially rejected the US-mediated deal, according to an Al Jazeera report citing the state-run National News Agency on Friday.

Underpinning the physical oil market is a severely disrupted maritime supply matrix contrasted against highly stable global consumption parameters.

The Strait of Hormuz, the world's most critical commercial choke point for energy transit, remains effectively closed to normalized international shipping corridors, ensuring a steep geopolitical premium remains permanently embedded across global prompt-month balances.

"A record two-thirds of institutional investors expect oil prices to fall despite continued disruption to the flow of oil from the Middle East," according to a Goldman Sachs' survey.

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