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US Oil Update: Oil Head for Weekly Loss Caught Between Diplomacy, Conflict

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Oil benchmarks were headed for weekly losses on Friday over renewed doubts over the peace deal between US and Iran.

The Brent futures contract was steady at $100.01 per barrel. West Texas Intermediate futures contract eased 0.5% to $94.31 per barrel. For the week, both contracts are still headed for weekly losses.

"Crude oil prices suffered a rollercoaster rise as doubts emerged over US-Iran peace negotiations," ANZ analysts said.

SEB analysts noted that "risks remain skewed to the upside, and we remain long volatility, and neutral on flat price ahead of Tehran's reply."

They further added that "the muted price action tells you the market is exhausted from headline trading, not that the next price move is decided."

On the supply side, fundamental data confirms that the prolonged obstruction of the Strait is severely taxing global reserves.

US Energy Information Administration data released Wednesday showed a 2.3-million-barrel drawdown in domestic crude stockpiles.

"Demand for US crude remains strong, with exports sitting at 4.75mb/d," ANZ noted.

This depletion is largely a result of American refineries utilizing domestic oil to compensate for international shortages, market experts said.

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Oil & Energy

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