Oil grades fell on Friday as US drilling activity increased and diplomatic progress on Strait of Hormuz shipping eased supply worries. The US oil rig count rose, Gulf and Iranian officials moved toward a shipping deal through the strait, and Light Louisiana Sweet's premium to US crude futures narrowed.
Oil grades dropped on Friday as US drilling activity increased and diplomatic efforts showed progress on Strait of Hormuz shipping issues, easing supply worries. Baker Hughes reported that oil rigs, which indicate future output levels, increased by one to 450 this week.
Supply disruption concerns nevertheless persisted. Yemen's Iran-aligned Houthis reached the strategic island of Perim in the Bab el-Mandeb Strait on Friday, strengthening their control over the shipping route amid the Iran war.
The International Energy Agency said global oil supply and demand are expected to decline more than previously forecast this year because of the war. World supply in 2026 is now projected to fall by 5.7 million barrels per day, or about 6%.
Chevron CEO Mike Wirth said oil buffers that previously limited crude price increases earlier in the Iran war have been used up, adding that the conflict could push prices higher over the next few months.
Against that backdrop, Light Louisiana Sweet for October delivery fell 50 cents to a midpoint of a $6.00 premium, bid and offered between a $5.50 and $6.50 per barrel premium to US crude futures.
Source: Commodities & Futures News
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