-- West Texas Intermediate (WTI) crude oil closed lower Friday as Iran made a new peace proposal, however U.S. President Trump rejected the plan.
WTI crude oil for June delivery closed down US$3.13 to US$101.94 per barrel, while July Brent oil was last seen down US$2.177 to US$108.23.
Reuters reported Iran offered a new proposal to reach a peace deal with the United States. While details were not disclosed Trump rejected the plan, telling reporters he was not satisfied with the plan. However he confirmed indirect talks mediated by Pakistan are continuing by phone.
Oil remains in short supply following the closure of the Strait, the chokepoint for exports from the Persian Gulf nations that accounted for 20% of daily demand. The lack of supply has pushed up crude oil prices by more than half since the Feb.28 start of the war amid shortages of crude oil and refined products, with Nymex gasoline futures up 81% since the war began while supplies of aviation are tightening.
The supply crunch comes ahead of the May 23 start to the Memorial Day weekend, the traditional start of the summer driving season, when demand for fuel peaks, which is likely to push prices even higher.
"With summer demand season quickly approaching, we see a path for oil prices to exceed the 2022 and even 2008 highs, especially as sentiment may finally be shifting on the duration of the Hormuz blockage," Helima Croft, Head of Global Commodity Strategy and MENA Research at RBC Capital Markets, wrote.