Oil falls but on track for 8% weekly gain on supply concerns; US diesel hits record high

Oil prices slipped on Friday, yet Brent and WTI remained on course for a rise of more than 8% over the week, according to Business Recorder. Brent crude futures were trading $3.45 lower at $104.18 a barrel, while WTI fell to $99.52 after both benchmarks hit their highest levels since mid-May. The decline came after the Financial Times reported that Middle Eastern foreign ministers are working toward a temporary arrangement with Iran to manage shipping through the Strait of Hormuz.

Assaults on regional shipping lanes have raised fears of prolonged disruption, and satellite images showed smoke near Saudi Arabia's East-West Pipeline, a route the kingdom uses to bypass Hormuz. The International Energy Agency said Saudi crude supply dropped by 2.3 million barrels per day in August to 6 million, the lowest level in over three decades, citing attacks on energy facilities. Ship crossings in Hormuz dropped from 11 on Wednesday to seven on Thursday, and the Houthis reportedly reached Perim island in the Bab el-Mandeb Strait, according to four Yemeni government sources cited by Reuters.

US diesel prices lifted the national average above $6 a gallon on Thursday for the first time, GasBuddy data showed, as Ukrainian strikes on Russian refineries added to Iran-war supply losses. Commerzbank now sees Brent at $85 a barrel by year-end, up from $75, while its diesel forecast of $1,200 per tonne compares with $950 previously.