Crude oil futures brace for volatility amid geopolitical uncertainties: Analysts

Crude oil futures are expected to remain volatile next week due to ongoing geopolitical uncertainties, particularly regarding US-Iran negotiations and tensions in West Asia, according to analysts. Hopes for a deal to reopen the Strait of Hormuz may provide a brief correction opportunity, but supply risks remain elevated. Investors will closely monitor reports from the Organization of the Petroleum Exporting Countries and the International Energy Agency, along with inventory data from the American Petroleum Institute and US government sources.

Analyst Navneet Damani noted that any positive response from Iran to US proposals could trigger a near-term correction, but diplomatic progress alone rarely ensures lasting supply recovery. The Strait of Hormuz remains constrained, with September's recovery largely dependent on costly and vulnerable alternative routes. Brent futures rose 2.41% to $104.72 per barrel, while West Texas Intermediate crude gained 1% to $91.85 per barrel, partly due to hurricane-related production disruptions.

The near-term outlook remains uncertain, with global supply expectations revised downward and Gulf supplies uncertain before 2027. Diplomatic talks in Miami between Western allies and Ukraine may provide some relief, but oil prices were capped after the US Treasury allowed Russia to release diesel into global markets.