Crude oil prices have their worst week since March 2023.

Although oil prices rose slightly on Friday, they closed with their biggest weekly drop since March 2023, as the absence of significant supply disruptions due to the conflict between Iran and Israel caused any risk premium to evaporate.

Brent crude futures rose 4 cents, or 0.06%, to $67.77 a barrel, while U.S. West Texas Intermediate crude gained 28 cents, or 0.43%, to $65.52.

European Brent fell 12% and WTI lost 12.63% this week.

Meanwhile, Mexican export crude rose 17 cents, or 0.28 percent, to $61.32 a barrel on Friday, but lost 12.91 percent for the week.

Four delegates from OPEC+, which includes allies from the Organization of the Petroleum Exporting Countries, said the group would increase output by 411,000 barrels per day in August, following a similarly large production increase already planned for July.

If the increase is agreed upon, total OPEC+ supply would increase by 1.78 million bpd year-to-date, equivalent to more than 1.5% of total global demand.

The group has not yet increased production to the agreed-upon volumes because some members are compensating for previous overproduction, and others need more time to get pumping back online.

The group has radically shifted its policy after several years of production cuts totaling more than 5 million bpd. In April, eight members began unwinding their latest 2.2 million bpd cut and accelerated production increases in May, June, and July, despite the additional supply weighing on crude oil prices.

They went up briefly

During the 12-day war that began after Israel attacked Iran's nuclear facilities on June 13, Brent crude prices briefly rose above $80 a barrel before falling to $67 a barrel after US President Donald Trump announced a ceasefire between Iran and Israel.

“The market has almost completely shrugged off the geopolitical risk premiums of a week ago as we return to a fundamentals-driven market,” said Rystad analyst Janiv Shah.

Phil Flynn, a market analyst at Price Futures Group, noted that expectations of higher demand in the coming months boosted crude oil prices early Friday. “We’re getting a demand premium on oil,” Flynn said.

Tamas Varga, an analyst at PVM Oil Associates, said prices had also been supported by oil inventory reports showing sharp drawdowns in middle distillates.

On Wednesday, U.S. government data showed that crude oil and fuel inventories fell last week, while refining activity and demand increased.

Meanwhile, data on Thursday showed that independent gasoil stocks at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell to their lowest level in more than a year, while Singapore's middle distillate inventories declined as net exports increased week on week.

In addition, Chinese imports of Iranian oil increased in June as shipments accelerated ahead of the Israel-Iran conflict and demand from independent refineries improved, analysts said.

China is the world's largest oil importer and the largest buyer of Iranian crude. It purchased more than 1.8 million barrels per day of Iranian crude from June 1 to 20, according to ship tracker Vortexa, a record based on the firm's data.

The number of U.S. oil and natural gas rigs, a leading indicator of future production, fell for the fourth consecutive month to its lowest level since October 2021, according to Baker Hughes.

The number of oil rigs fell by six to 432 in the week, also the lowest level since October 2021.

Oil companies down

Last week, publicly traded oil company stocks also saw significant declines in value, following the collapse in oil prices.

Shares of China Petrol, a Chinese company, fell 5.90 percent, followed by shares of the U.S.-based ConocoPhillips, which lost 4.77 percent, and shares of Exxon Mobil, also in the U.S., which fell 4.64 percent.

In fourth place among the oil companies that lost the most was French company Total Energies, with a 3.92% loss in its share price last week. Chevron fell 3.85% and Shell 3.19%. (With information from Reuters)