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WTI rises for the week as Strait of Hormuz risk premium rebuilds
September WTI last traded at $81.19, up $4.11 or 5.3% for the week, after traders scaled back hopes for reopening the Strait of Hormuz as shipping traffic stayed well below normal.
Traders are rebuilding the risk premium tied to the Strait of Hormuz as expectations for a diplomatic agreement fade, according to OilPrice. September WTI crude oil futures were last quoted at $81.19 late Thursday, up $4.11 or 5.33% for the week, with Friday’s session still pending.
The premium retracement followed a shift in market views, after last week’s optimism about reopening the waterway unraveled when talks did not produce an agreement. OilPrice said Iran kept its conditions in place and the United States raised its own demands, leaving tanker traffic far below normal.
OilPrice also attributed the week’s price strength to positioning changes rather than a fresh supply loss. With traders having stripped out risk premium before shipping conditions improved, the persistent logistics picture pushed shorts to cover and brought buyers back.
Prices moved higher earlier in the week, with WTI pushing above $84.00 and Brent briefly above $90.00, OilPrice said. The rally then slowed as demand concerns returned, leaving WTI still higher on the week but no longer near its peak.
Latest closeWTI crude $81.19 ▼2.5%|Brent $86.96 ▼2.3%