You are here: Home » International » News » Markets
Business Standard

Oil rises but set for weekly loss as traders assess supply disruptions

US President Joe Biden said the G7 industrialized nations will revoke Russia's 'most favored nation' trade status, and announced a US ban on Russian seafood, alcohol and diamonds

Crude Oil Price | crude oil supply | OPEC


Photo: Bloomberg

Oil prices rose Friday but were still headed for a weekly decline as traders weighed headlines around and suggesting more possible supply disruptions, versus those promising remedies in a tight market.

Benchmark futures have soared since Russia's invasion of and hit their highest levels since 2008 at the start of this week but pulled back sharply over the last two sessions, as some producing countries signalled they may act to increase supply.

Brent crude futures rose $2.46, or 2.3%, to $111.79 a barrel by 11:49 a.m. ET (1649 GMT) after hitting a low of $111.74 earlier. U.S. West Texas Intermediate (WTI) crude futures rose $3.09, or 2.9%, to $109.11 a barrel, rebounding from a session low of $104.48.

U.S. President Joe Biden said the G7 industrialized nations will revoke Russia's "most favored nation" trade status, and announced a U.S. ban on Russian seafood, alcohol and diamonds. The United States had banned Russian oil purchases earlier in the week.

Meanwhile, talks to revive the 2015 nuclear deal on Friday faced the threat of collapse after a last-minute Russian demand forced world powers to pause negotiations for an undetermined time despite having a largely completed text.

Brent, which rose over 20% last week, was on track for a weekly fall of over 5% after hitting $139.13 on Monday. U.S. crude was headed for a weekly drop of near 6% after touching a high of $130.50 on Monday. Both contracts last touched these price peaks in 2008.

Volatility was fuelled this week as the Russia- conflict pushed the United States and many Western oil firms to stop buying Russian oil amid talk of potential supply additions from Iran, Venezuela and the United Arab Emirates.

"We have a close eye on the pressure valves that will absorb the supply shock," said UBS head of economics Norbert Ruecker.

In the near term, supply gaps are unlikely to be filled by extra output from members of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, given is part of the grouping, Commonwealth Bank analyst Vivek Dhar said.

In addition, some OPEC+ producers, including Angola and Nigeria, have struggled to meet their production targets, limiting the group's ability to offset Russian supply losses.


(Reporting by Shariq Khan, Additional reporting by Shadia Nasralla, Sonali Paul and Mohi Narayan; Editing by Marguerita Choy and Nick Zieminski)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, March 11 2022. 23:15 IST