Oil inches toward $90 on tanker attacks, lack of progress in Iran war peace deal

Brent futures settled at $88.52 a barrel, up $1.45, or 1.67%. U.S. West Texas Intermediate crude futures finished at $82.40, up $1.15, or 1.42%.

Brent and WTI were on track for weekly gains of 6.0% and 5.4%, respectively.

"We're getting a rally going into the weekend after new attacks on tankers and lack of progress on a cease-fire agreement," said Andrew Lipow, president of Lipow Oil Associates.

A "day of reckoning" may come if traffic in the strait of Hormuz remains constrained, through which 20% of global supply can pass, Lipow said.

Crude oil prices might be $80 a barrel, but diesel prices are $180 a barrel and gasoline is $130 a barrel and that's what's hitting the consumer," Lipow said.

TRAFFIC SLOWS THROUGH THE STRAIT

As the U.S. and Iran made claims over control of the strait, shipping traffic through the channel fell below the month's average.Before U.S.-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies.

Two vessels from the state-owned Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday, the United Arab Emirates' state news agency WAM said, an incident the UAE government condemned as an Iranian attack.

"That's the headline that pushed up prices: Tankers attacked," said Phil Flynn, senior analyst for Price Futures Group.

Crude oil exports from Russia's Sheskharis terminal at the Black Sea port of Novorossiysk were suspended on Friday following a drone attack, three sources familiar with the matter said, adding to disruptions at one of the country's key export outlets.

Flynn said the Ukrainian attack on the port of Novorossiysk was also boosting prices.

While Middle Eastern supplies are constrained, OPEC forecasts pointed to weaker demand growth and U.S. crude inventories posted their largest weekly increase in more than 3-1/2 years.

"This week's reports by the IEA and EIA were quite revealing. Storage is holding up much better than feared, which should pull oil prices lower," said Norbert Rucker, head of economics and next generation research at Julius Baer, referring to the International Energy Agency and U.S. Energy Information Administration.

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