Mar 18, 2022 03:56AM ET
By: AnalysisWatch
Oil prices continued to build on their gains on Friday at the close of a third volatile trading week, after limited progress in peace talks between Russia and Ukraine raised the specter of tighter sanctions and prolonged disruption in oil supplies.
Nevertheless, despite setbacks on the battlefield and punitive measures by the West, Russian President Vladimir Putin has hardly shown any signs of relenting. The fourth day of discussions between Russian and Ukrainian mediators occurred via video link, but the Kremlin said no deal had yet been struck.
Brent crude futures were up 82 cents, or 0.8 percent, at $107.46 per barrel at 04:42 a.m.
ET, after rising nearly 9 percent on Thursday, the largest percentage gain since mid-2020.
US West Texas Intermediate crude futures climbed $1.14, or 1.1%, to $104.12 a barrel, after rising 8% on Thursday.
Despite the rally, both benchmark contracts are likely to finish the week lower by more than 4% after trading in a range of $16. Prices have fallen back from 14-year peaks touched almost a fortnight ago.
Tightening supplies from sanctions against Russia, stuttering nuclear talks with Iran, dwindling oil stocks, and fears that a surge in COVID-19 cases in China could hit demand drove the rollercoaster ride this week.
Analysts said remarks by a Kremlin spokesman reporting major progress in peace talks were "false" and US President Joe Biden's calling Putin a "war criminal" triggered a wave of buying on Thursday.
Helima Croft, an analyst at RBC Capital, warned that losses in Russian oil exports are likely to be permanent and that the supply of offset barrels is tight.
Consultancy FGE said onshore product inventories in key countries are 39.9 million barrels lower than the 2017-2019 average and also 45 million barrels less than the prior year, highlighting tight supplies.
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