Oil Futures Settle Higher on Inventory Worries

1535 ET – Oil futures post back-to-back gains as the prolonged closure of the Strait of Hormuz starts to raise concerns about falling global inventories. “While strategic releases and demand reduction have prevented immediate chaos, the margin for error is shrinking rapidly,” Phil Flynn of the Price Futures Group says in a note. A continued closure of the strait points to tighter physical markets, potential product shortages, and upward pressure on prices in coming weeks and months. On the other hand, prices further out on the curve may be suggesting that demand destruction, strategic releases, and non-Gulf supply responses “are proving more effective and elastic than the bullish narrative suggests.” WTI settles up 4.2% at $105.42 a barrel for a 10% weekly gain. Brent rises 3.3% to $109.26, up 7.9% on the week. (anthony.harrup@wsj.com)

Brent Set for Weekly Loss of More Than 7% as Hormuz Impasse Worries Markets

1406 GMT – Oil prices are little changed, with Brent headed for a weekly loss of more than 7% as hopes for a swift reopening of the Strait of Hormuz have faded. Brent crude is up 2.7% to $108.56 a barrel, while WTI futures rise 2.9% to $99.71 a barrel. At the end of a two-day summit with Chinese leader Xi Jinping, U.S. President Donald Trump said China agreed that the war in Iran should end and ship traffic through the Strait of Hormuz be free. Still, a lack of progress in U.S.-Iran negotiations is making markets nervous. “The longer the Strait of Hormuz remains blocked, the more attention is focused on inventory levels,” analysts at Commerzbank say. “If the U.S. Department of Energy’s weekly inventory report shows another significant drawdown in U.S. oil stocks, this is likely to support oil prices.” (giulia.petroni@wsj.com)