Oil prices were little changed on Friday before a long holiday weekend in the US, as traders held on to hopes that attempts to secure peace in the Middle East between the United States and Iran would succeed. Brent futures climbed 7 cents, or 0.1%, to $71.87 a barrel as of 0737 GMT. West Texas Intermediate was down 6 cents, or 0.09%, to $68.63 a barrel. US markets will be closed on Friday ahead of the US Independence Day holiday on Saturday. During the prior session the two benchmarks hit their lowest levels since before the US-Israeli war on Iran began in late February. Brent for the week was down 0.16% and WTI down 0.87%, the smallest weekly movements for both in months. “It's a case of guarded optimism, with the market wanting to believe the peace efforts will hold, but it’s still hedging its bets until it sees real evidence on the water,” said Tim Waterer, chief market analyst at KCM Trade. SOME SHIPPING RESUMES THROUGH THE STRAIT Some shipping has resumed through the Strait of Hormuz, as called for under the initial deal between Iran and the United States, but levels of uncertainty are high after the two countries exchanged strikes last weekend following an Iranian attack on a cargo ship. As the availability of supplies grows, the market structure has turned from backwardation to contango, reflecting decreasing expectation of future shortages. The spread between front-month Brent and one-month forward turned negative on June 24, while the six-month spread turned negative on Thursday. "The return of this supply coincides with continued SPR releases," ING analysts said in a note on Friday, referring to the US Strategic Petroleum Reserve. The cheaper near-term supplies could encourage buyers, they added, which could support prices.
