Both Brent and West Texas Intermediate (WTI) oil prices were down on Friday, but still on track for notable monthly gains, Naeem Aslam, CIO at Zaye Capital Markets, outlined in a market analysis sent to Rigzone today.
In the analysis, Aslam highlighted that Brent crude was trading near $88 per barrel and WTI was trading near $82 per barrel on Friday, noting that both benchmarks were lower during the session, with Brent down approximately 1.2 percent and WTI down around 1.8 percent. He pointed out, however, that they remained on course for monthly gains of roughly 20 percent.
“The decline reflected improving tanker movements through the Strait of Hormuz and other regional shipping routes, reducing immediate fears of a complete supply interruption,” Aslam said in the analysis.
Oil prices nevertheless remain elevated because freight rates, insurance costs, and the geopolitical premium attached to Middle Eastern crude exports are still considerably higher than normal,” he warned.
Aslam stated in the analysis that U.S. President Donald Trump’s statements are influencing oil mainly through geopolitical expectations rather than direct changes to physical supply.
“His claim of progress on Hamas disarmament and a Gaza transition could reduce part of the crude oil risk premium if it produces verifiable and lasting regional de-escalation,” Aslam said.
“In contrast, continued threats of military action against Iran preserve the possibility of renewed disruption around the Strait of Hormuz, oil terminals, and regional energy infrastructure,” he added.
“The Freedom Haulers initiative has a smaller and more indirect impact: changes to commercial-driver availability could affect U.S. diesel consumption, fuel distribution, and freight costs, but the effect on global crude prices will depend on whether the program improves transport capacity or creates short-term labor shortages,” he continued.
Aslam also highlighted in the analysis that yesterday’s U.S. economic releases delivered a mixed signal for the global oil demand outlook.
“Second quarter GDP expanded at an annualized rate of 1.5 percent, slowing from 2.1 percent in the first quarter, while real final sales to private domestic purchasers increased 3.9 percent, showing that underlying private-sector demand remained resilient,” he said.
“Headline PCE inflation declined 0.1 percent month over month but remained 3.7 percent higher year over year, while core PCE rose 0.1 percent monthly and 3.3 percent annually,” he added.
“Initial jobless claims increased to 197,000 from 188,000, while continuing claims fell to 1.782 million. Slower headline growth and rising claims raise concerns about future fuel consumption, but resilient domestic demand and persistent inflation prevent the data from signaling an immediate collapse in oil demand,” he continued.
Aslam went on to state that today’s Employment Cost Index, revised consumer sentiment, revised inflation expectations, and Eurozone inflation releases will influence oil through expected economic growth, the U.S. dollar, and monetary-policy pricing.
“Stronger wage growth and consumer confidence could improve expectations for travel, freight activity and fuel consumption, but they could also strengthen the dollar and keep interest rates restrictive, creating resistance for dollar-denominated crude,” he said.
“Weaker data may reduce the dollar and offer short-term price support, although recession concerns would damage the demand outlook,” he added.
Aslam concluded his analysis by highlighting that “OPEC expects global oil demand to increase by approximately 0.8 million barrels per day in 2026, while the IEA projects weaker consumption alongside substantial changes in global supply”.
“Combined with a 7.17 million barrel decline in U.S. commercial crude inventories and a 771,000 barrel fall at Cushing, the current oil market remains balanced between tighter physical supply, geopolitical risk, and uncertainty over the durability of global economic demand,” he pointed out.
In a market quick take posted on its website on Friday, Saxo Bank highlighted that Trump had announced a deal for the full disarmament of Hamas and other armed groups in Gaza, with the territory to be placed under a new Palestinian government. The bank described the development as “a potential breakthrough after years of conflict”.
The bank also pointed out in its quick take that October Brent dropped toward $85 per barrel early Friday after Thursday’s high above $89 per barrel and noted that September WTI traded near $81.60 per barrel. It outlined that oil was “still on pace for a large monthly advance as the U.S.-Iran conflict continues to strain shipping through the Strait of Hormuz”.
In a conflict update sent to Rigzone by the Skandinaviska Enskilda Banken AB (SEB) team on Friday, Chief EM Strategist Erik Meyersson warned that the Iran War is “once again on the cusp of escalation, putting people, economies, and global energy markets at risk”.
“Last week, we argued that a more constructive case is one where the U.S. was delaying the inevitable; providing concessions to Iran in order to restore transit through the Strait of Hormuz,” Meyersson said in that updated.
“A more pessimistic scenario is one where the two sides are currently unable to resolve differences through diplomatic means as policy positions remain entrenched, opening for a possible broadening and intensification of the conflict,” he added.