Oil prices were steady on Friday and poised for a weekly increase amid an improving outlook for demand in the U.S. and China. Concerns over supply disruptions in Russia also lent support.
Brent futures dipped 3 cents to $76.45 a barrel by 0414 GMT while U.S. West Texas Intermediate crude edged down 4 cents to $72.44.
Both indexes have gained over 2% this week – the largest weekly advances since early January. Brent would be marking a second week of gains after three weeks of declines. WTI is set to have its first week of gains after four weeks of declines.
Global oil demand has averaged 103.4 million barrels per day (bpd) through February 19, a 1.4 million bpd increase, JPMorgan analysts said in a note on Friday.
They expect cold weather in the U.S. and increased industrial activity in China as people return from holidays to contribute more demand in the coming week.
U.S. crude oil stockpiles rose while gasoline and distillate inventories fell last week as seasonal maintenance at refineries led to lower processing, the Energy Information Administration said on Thursday.
“Drawdowns of U.S. gasoline and distillate stockpiles, along with concerns over tight supplies in Russia, are supporting oil prices,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“Expectations for a potential peace deal between Russia and Ukraine, which could ease sanctions on Moscow, have faded somewhat due to Ukraine’s hardened stance, prompting some investors to buy back into the market,” he added.
Ukraine President Volodymyr Zelenskiy earlier in the week was enraged by U.S. and Russian moves to negotiate a peace deal without Kyiv and comments by U.S. President Donald Trump blaming Ukraine for starting the three-year-old conflict with Moscow.
However, following a meeting with Trump’s envoy for the Ukraine conflict on Thursday, Zelenskiy said Ukraine was ready to work quickly to produce a strong agreement on investments and security with the United States.
U.S. Treasury Secretary Scott Bessent told Bloomberg Television on Thursday that Russia could win some relief from U.S. sanctions based on its willingness to negotiate an end to its war in Ukraine.
Meanwhile, disruptions to oil supply continued to keep prices elevated.
Russia said Caspian Pipeline Consortium oil flows, a major route for crude exports from Kazakhstan, were reduced by 30%-40% on Tuesday after a Ukraine drone attack on a pumping station.
Kazakhstan has pumped record high oil volumes despite damage on its main export route via Russia, the Caspian Pipeline Consortium (CPC), industry sources said on Thursday. It was not immediately clear how Kazakhstan had been able to pump record volumes.
Source: Reuters