By Nicole Jao
NEW YORK (Reuters) -Oil prices edged higher on Friday after a more than 1% loss in the previous session, as investors weighed the diminishing prospects of a quick end to the Ukraine war that could bring back more Russian energy supplies to Western markets.
Brent crude futures were up 36 cents, or 0.52%, to $70.24 a barrel at 11:30 a.m. EDT (1530 GMT), after settling 1.5% lower in the previous session. U.S. West Texas Intermediate crude was at $66.94 a barrel, up 39 cents, or 0.59%, after closing down 1.7% on Thursday.
Prices are set to end the week more or less stable from last Friday, when Brent settled at $70.36 and WTI at $67.04.
“Brent oil has hovered around the $70 mark for the past two weeks. Whether it will remain at this level in the coming week depends on the political news situation,” Commerzbank analysts said in a note.
Russian President Vladimir Putin said on Thursday that Moscow supported a U.S. proposal for a ceasefire in Ukraine in principle, but sought a number of clarifications and conditions that appeared to rule out a quick end to the fighting.
“If the prospect for a ceasefire continues to be pushed into the future, the market would expect Russian oil to be under sanctions for an extended period of time,” said Andrew Lipow, president of Houston-based Lipow Oil Associates.
Raising pressure on Putin to come to a peace agreement, the Trump administration said on Thursday that a licence allowing energy transactions with Russian financial institutions expired this week.
Chinese state firms are also curbing Russian oil imports on sanctions risks, sources told Reuters.
On Friday, China and Russia stood by Iran after the U.S. demanded nuclear talks with Tehran, with senior Chinese and Russian diplomats saying dialogue should only resume based on “mutual respect” and all sanctions ought to be lifted.
“Most price projections were to the downside in the short term, but geopolitical tension could still cause supply disruptions,” ANZ analysts said in a note to clients.
The International Energy Agency warned on Thursday that global oil supply could exceed demand by around 600,000 barrels per day this year, due to growth led by the U.S. and weaker-than-expected global demand.
Unstable macroeconomic conditions caused by escalating trade tensions between the U.S. and other nations prompted the IEA to cut its demand growth estimates for the last quarter of 2024 and the first quarter of this year.
“High risks on the demand side and increasing supply from OPEC+ argue against a sustained recovery in oil prices,” Commerzbank analysts said.
(Reporting by Nicole Jao in New York, Robert Harvey in London, Florence Tan in Singapore; Editing by Mark Potter and Nia Williams)
