HOUSTON, May 22 (Reuters) – Oil prices gained on Friday as investors doubted the prospect of a breakthrough in U.S.-Iran peace talks and buyers prepared for the start of the U.S. summer driving season, but remained on track for a weekly loss.
Brent crude futures were up $1.58, or 1.54%, at $104.16 a barrel by 9:44 a.m. CDT (1444 GMT), while U.S. West Texas Intermediate futures were $1.17, or 1.21%, higher at $97.52. Both had risen over 3% earlier in the session.
On a weekly basis, Brent was more than 4% lower and WTI was down by more than 7%, with prices fluctuating sharply as expectations for a peace deal between Iran and the U.S. shifted.
A diplomatic source in Islamabad told Iran’s state news agency IRNA that Pakistan’s army chief had left for Iran. A senior Iranian source told Reuters earlier that gaps with the U.S. have narrowed, and U.S. Secretary of State Marco Rubio spoke of “some good signs” in talks.
“There’s been some progress. I wouldn’t exaggerate it. I wouldn’t diminish it,” Rubio told reporters after a NATO ministers’ meeting in Sweden. “There’s more work to be done,” he added. “We’re not there yet. I hope we get there.”
Rubio said the United States was in constant communication with the Pakistanis who are facilitating the talks with Iran.
However, the countries are still divided on Tehran’s uranium stockpile and controls on the Strait of Hormuz.
Rubio also said the U.S. had not requested the assistance of NATO allies in reopening the strait.
The market has been trying to assess when a possible peace deal might be struck, while global oil inventories are depleting at an alarming pace as oil flows via the Strait of Hormuz slow to a trickle, said PVM Oil Associates analyst Tamas Varga.
“The optimism of a relatively imminent truce and bearish rhetoric whenever Brent approaches $110 prevents oil prices from rallying significantly higher,” he said.
Separately, a Qatari negotiating team arrived in Tehran on Friday in coordination with the U.S. to help secure a deal, a source with knowledge of the matter told Reuters on Friday.
Six weeks since a fragile ceasefire took effect, efforts to end the U.S.-Israeli war with Iran have shown little progress, while elevated oil prices have fuelled concern over inflation and the outlook for the global economy.
BMI, a unit of Fitch Solutions, has raised its average 2026 dated Brent price forecast to $90 from $81.50 to reflect the supply deficit, time required to repair damaged Gulf energy infrastructure, and a six-to-eight-week post-conflict normalisation window.
