Oil Prices Settle Down on Friday, Posting Weekly Decline Amid Fading Middle East Risk Premium and Uncertainty Over Ukraine Peace Deal
Oil Prices Fall Amid Calm in the Middle East and Uncertainty Over Ukraine Peace Deal
Oil prices settled down more than US$2 a barrel on Friday, posting a weekly decline as investors grappled with a fading Middle East risk premium alongside uncertainty over a potential peace deal in Ukraine.
Brent and US Crude Prices Fall
Brent futures settled down US$2.05, or 2.7 per cent, at US$74.43 a barrel, while US West Texas Intermediate crude settled down US$2.08, or 2.9 per cent, at US$70.40.
Weekly Loss for Brent and US Crude
Brent settled 0.4 per cent down on the week, while US crude futures posted a 0.5 per cent weekly loss.
Market Analysis
“There is a risk-off tone here,” said John Kilduff, a partner at Again Capital in New York, also citing relative calm in the Middle East as the Gaza ceasefire holds.
US Crude Oil Stockpiles Rise
Investors also continued to weigh an uptick in US crude oil stockpiles, reported on Thursday, as seasonal maintenance at refineries led to lower processing, the Energy Information Administration said.
US Oil and Gas Rig Count Rises
US energy firms this week added oil and natural gas rigs for a fourth week in a row to the highest level since June, energy services firm Baker Hughes said in a report on Friday.
Caspian Pipeline Consortium Oil Flows Reduced
Traders’ focus was also on oil supply disruption, however, capping some losses. Russia said Caspian Pipeline Consortium (CPC) oil flows, a major route for crude exports from Kazakhstan, were reduced by 30 to 40 per cent on Tuesday after a Ukrainian drone attack on a pumping station.
Tengiz Oil Field Flows Unaffected
But oil flows from Kazakhstan’s Tengiz oil field via CPC are uninterrupted, Russian news agency Interfax reported on Friday, citing Tengizchevroil.
Kazakhstan Pumps Record High Oil Volumes
Kazakhstan has pumped record high oil volumes despite damage to its CPC export route via Russia, industry sources said on Thursday. It was not immediately clear how Kazakhstan had been able to pump record volumes.
Conclusion
Oil prices settled down more than US$2 a barrel on Friday, posting a weekly decline as investors grappled with a fading Middle East risk premium alongside uncertainty over a potential peace deal in Ukraine. The market is expected to continue to be affected by these factors in the coming week.
FAQs
Q: What was the weekly decline in oil prices?
A: Brent settled 0.4 per cent down, while US crude futures posted a 0.5 per cent weekly loss.
Q: What was the reason for the decline in oil prices?
A: A fading Middle East risk premium and uncertainty over a potential peace deal in Ukraine.
Q: What was the impact of the Ukrainian drone attack on oil flows?
A: Oil flows from Kazakhstan’s Tengiz oil field via CPC were reduced by 30 to 40 per cent on Tuesday after a Ukrainian drone attack on a pumping station.
Q: How did Kazakhstan pump record high oil volumes despite damage to its CPC export route?
A: It was not immediately clear how Kazakhstan had been able to pump record volumes.
