Oil prices record the highest weekly rise in 3 months supported by supply crises
Oil markets are experiencing a strong upward wave heading towards recording the largest weekly gains since last June, as geopolitical tensions and attacks on energy infrastructure in Russia enhance concerns about supply shortages, driving prices up.
Brent crude futures rose by 15 cents during trading today, Friday, reaching $69.57 per barrel, while West Texas Intermediate crude jumped 23 cents to $65.21 per barrel. With this increase, the two benchmark crudes achieved weekly gains exceeding 4%, the highest since mid-June, as they touched their highest levels in months.
This strong rise is primarily driven by ongoing Ukrainian attacks on Russian oil facilities, which prompted Moscow to take restrictive measures. Russian Deputy Prime Minister Alexander Novak announced a partial ban on diesel exports until the end of the year, along with an extension of the current ban on gasoline. These measures are close to causing an actual reduction in Russian crude production due to declining refining capacities, amid local areas suffering from shortages of some fuel types.
Analyst Tony Sycamore from "IG" confirms that "the gains came supported by ongoing Ukrainian strikes against Russian oil infrastructure, and NATO's warning to Russia that it is ready to respond to aerial violations, along with Moscow's move to halt major fuel exports".
On the other hand, some factors have pressured to curb the gains and limited the upward momentum. Strong U.S. data, which showed GDP growth of 3.8%, raised market concerns about the possibility of the Federal Reserve delaying interest rate cuts, weakening the expected future demand for oil. Additionally, the announcement by the Kurdistan Regional Government of Iraq to resume oil exports within 48 hours posed another pressure factor threatening to increase supply in the market.
Thus, oil prices continue to fluctuate between concerns about supply shortages due to geopolitical tensions and economic indicators affecting future demand, in a scene that highlights the market's sensitivity to any developments on both the supply and demand sides.
