Oil Prices Rise As Ukraine Ceasefire Deal Elusive
Oil prices rose on Friday to recover some of their more than 1% losses in the previous session, partly as prospects for a quick end to the Ukraine war diminished that could restore more Russian energy supplies.
Brent crude futures were up 64 cents, or 0.9%, at $70.52 a barrel by 0748 GMT after closing 1.5% lower in the previous session. U.S. West Texas Intermediate crude futures were at $67.26 a barrel, up 71 cents, or 1.1%, after closing down 1.7% on Thursday.
Russian President Vladimir Putin said on Thursday that Moscow supported a U.S. proposal for a ceasefire in Ukraine in principle, but asked for a number of clarifications and conditions that appeared to rule out a quick end to the fighting.
"Russia's lukewarm support for a proposed 30-day ceasefire with Ukraine has reduced confidence in the short-term truce," said IG market analyst Tony Sycamore.
"The feeling is that the U.S. will not lift sanctions until they agree to a ceasefire."
Increasing pressure on Russian President Vladimir Putin to reach a peace deal over Ukraine, the Trump administration said on Thursday that licenses allowing energy transactions with Russian financial institutions expire this week.
Chinese state companies are also curbing imports of Russian oil because of the risk of sanctions, sources told Reuters.
However, a global trade war that has roiled financial markets and raised fears of a recession escalated with U.S. President Donald Trump threatening on Thursday to impose 200 percent tariffs on European wine, cognac and other alcohol imports.
The International Energy Agency warned on Thursday that global oil supply could exceed demand by about 600,000 barrels per day this year, due to U.S.-led growth and weaker-than-expected global demand.
"Macroeconomic conditions supporting our oil demand forecasts have deteriorated over the past month as trade tensions escalated between the U.S. and several other countries," the IEA said, prompting it to revise down its demand growth estimates for the fourth quarter of 2024 and the first quarter of 2025.
Trump-driven trade war woes and demand concerns had dented oil prices earlier in the day, although the prospect of less Russian oil in the global market in the near term provided some support during Friday's trade.
"Most price projections are down in the near term, but geopolitical tensions could still cause supply disruptions," ANZ analysts said in a note to clients.
On Friday, China and Russia backed Iran after the United States demanded nuclear talks with Tehran, with senior Chinese and Russian diplomats saying dialogue should only resume on the basis of "mutual respect" and all sanctions should be lifted.
This came a day after Washington increased sanctions, including on Iranian Oil Minister Mohsen Paknejad.
Source: Investing.com
