Oil prices were poised for their biggest weekly declines since last June but remain elevated near $100 a barrel on concerns over supplies from Saudi Arabia and limited flows through the Strait of Hormuz.
Brent crude futures were up five cents, or 0.05%, at $95.97 a barrel today. West Texas Intermediate futures rose 24 cents, or 0.25%, to $98.11.
Both contracts have lost about 12% this week after Iran and the US agreed on Tuesday to a two-week ceasefire brokered by Pakistan.
However, fighting has continued and the flow of oil through the Strait of Hormuz remains heavily restricted, keeping futures near $100 a barrel and pushing prices in the physical market to record highs.
"The key issue for the oil market is whether ship traffic through the Strait of Hormuz will resume. So far, there are no signs of this happening. If oil supplies from the Persian Gulf remain blocked, oil prices are likely to rise again," Commerzbank analysts said in a note today.
Traffic through the Strait of Hormuz remained less than 10% of normal volumes as Tehran asserted its control by warning ships to keep to its territorial waters.
The majority of ships that have sailed through the Strait of Hormuz in the past day were linked to Iran, ship-tracking data showed today.
Iran wants to charge fees for ships to pass through the strait under a peace deal, a Tehran official told Reuters on April 7. Western leaders and the United Nations' shipping agency have pushed back on the idea.
The crucial artery for oil and gas flows has been effectively shut down by the conflict that began when the US and Israel launched airstrikes against Iran on February 28.
"The Strait of Hormuz remains effectively constrained and operation of the global oil system is far from normal," said Saxo Bank analyst Ole Hansen, adding that futures markets have priced in a partial normalisation but the physical market is reflecting acute scarcity.
Prices were stable today as investors balanced lower Saudi output with diplomatic progress. Saudi state news agency SPA reported yesterday that attacks on Saudi energy facilities have cut the kingdom's oil production capacity by about 600,000 barrels per day and reduced its East-West Pipeline throughput by about 700,000 bpd.
Meanwhile, Lebanon said it intends to take part in a meeting with US and Israeli representatives in Washington next week to discuss and announce a ceasefire in the parallel war waged by Israel against Iran's Hezbollah allies in the country.
