Oil snapped a seven-week losing streak as US equity markets rebounded and peace talks between Russia and Ukraine stalled, damping expectations that Moscow’s crude will return to the market soon.
West Texas Intermediate rose almost 1% to settle above $67 a barrel, supported by a weaker dollar and an advance in US equities. Brent climbed to settle below $71. Russian President Vladimir Putin said Ukrainian troops in the Kursk region should lay down their arms, and Ukraine pushed back on the request, raising doubts about how soon a ceasefire could be achieved.
US crude eked out a 0.2% gain for the week, barely skirting an eighth straight weekly decline that would have been its longest such losing streak since 2015. US President Donald Trump’s salvos against the country’s major trading partners have weighed on crude prices since mid-January, raising the prospect of sputtering economic growth and falling oil consumption. Long-term inflation expectations jumped by the most since 1993, painting a gloomy picture for future energy demand.
US crude earlier rose as much as 1.4% after the White House imposed sanctions on Iran’s oil minister and on more companies and vessels used by the OPEC member, while also restricting payment options for Russian energy, before paring the gains.
Still, the ceasefire negotiations unfolding between Russia and Ukraine, as well as macroeconomic risk, are holding traders’ attention for now, said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.
The sanctions developments are “all just words until they’re enforced, so the market is less reactive to the headlines recently,” Babin said.
The potential return of Russian barrels comes amid projections the market already is headed for an oversupply. The IEA forecasts the global supply surplus is set to deepen as an escalating trade war pressures demand at the same time that OPEC+ is reviving output.
Oil Prices:
WTI for April delivery advanced 0.9% to settle at $67.18 a barrel in New York.
Brent for May settlement rose 1% to settle at $70.58 a barrel.