Here's a look at what happened in oil markets in the week of Aug. 24-28 and what the focus will be in the days to come.

OVERVIEW: Oil prices are set to end the week lower despite diplomatic efforts to end the conflict between U.S and Iran appearing to stall. Brent crude futures, the global oil benchmark, are trading at $88.27 a barrel, while West Texas Intermediate futures are at $79.85 barrel.

MACRO: The Federal Reserve's preferred inflation gauge, the personal-consumption expenditures price index, rose by 0.2% in July, adding to pressure on Treasury yields that had jumped to multiyear highs last week. Fed Chairman Kevin Warsh's speech later Friday at the Jackson Hole summit will help shape market expectations for the central bank's rate-setting path, with yields rising slightly ahead of the speech. Traders are pricing in a 64% probability that the Federal Reserve will leave rates unchanged at its next meeting, according to CME Group's FedWatch tool.

GEOPOLITICAL RISKS: Hopes that diplomatic efforts between Oman and Iran would lead to a reopening of the Strait of Hormuz faded as the week wore on. A joint statement from the countries said they discussed a framework that would establish a temporary shipping route through the Strait of Hormuz. However, sentiment was dampened by U.S. disinterest in the talks, while the White House has told mediators the U.S. won't return to temporary peace terms agreed with Iran in June, The Wall Street Journal reported.

SUPPLY AND DEMAND: There are signs that additional oil is flowing through the Strait of Hormuz, which will put downward pressure on prices. ING had assumed around 5 million barrels of oil a day were exiting the waterway but there are some who suggest it could be as high as 6 million to 8 million a barrels a day, the banks' analysts Warren Patterson and Ewa Manthey wrote.

"As the conflict persists, producers are adapting to the new realities and becoming increasingly comfortable navigating the strait. However, we're clearly still far from normalization," they said.

The supply picture is also muddied by unconfirmed reports that Venezuela is considering exiting the Organization of the Petroleum Exporting Countries. How much impact this would have on oil prices is unclear given the disarray of the country's oil sector and limited capacity to rapidly increase production.

WHAT'S AHEAD: Market watchers will have a close eye on the Jackson Hole meeting for any signals on the path of U.S. interest rates. They will also be watching further intervention by the U.S. Treasury in the long-dated debt markets.