Oil climbs, set for fourth week of gains as US sanctions hit supply
Oil prices rose on Friday, heading for a fourth consecutive week of gains as the latest U.S. sanctions on Russian energy trade hit supply, pushing up spot trade prices and shipping rates.
Brent crude futures were trading 55 cents or 0.7% higher at $81.84 per barrel as of 0804 GMT and have gained 2.6% so far this week.
U.S. West Texas Intermediate crude futures were up 72 cents or 0.9% at $79.4 a barrel, having climbed 3.6% for the week.
The Biden administration last Friday announced broader sanctions targeting Russian oil producers and tankers and followed that with more measures against Russia's military-industrial base and sanctions-evasion efforts.
Analysts estimate that around 10% of the world's oil tanker fleet is now subject to U.S. sanctions. The drop in shipping capacity and a ban imposed by Shandong Port Group on U.S.-sanctioned tankers from calling into its ports has tightened oil supply and pushed buyers to scramble for replacement barrels.
Expectations for better demand lent some support to the oil market. Data showed inflation easing in the United States, the world's biggest economy, bolstering hopes of interest rate cuts.
Inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday.
Meanwhile, data on Friday showed China's economy matched the government's ambitions for 5% growth last year, although many Chinese feel their living standards have worsened.
China's oil refinery throughput in 2024 fell for the first time in more than two decades barring the pandemic-hit year of 2022, government data also showed on Friday, as plants pruned output in response to stagnant fuel demand and depressed margins.
Also weighing on oil prices were remarks by Yemen maritime security officials who said the Houthi militia is expected to announce a halt in its attacks on ships in the Red Sea in the wake of a ceasefire deal in the war in Gaza between Israel and the militant Palestinian group Hamas.
The attacks have disrupted global shipping, forcing firms to make longer and more expensive journeys around southern Africa for more than a year.
Source: Reuters
