Oil Prices Edge Up Despite Weekly Dip Outlook
Global oil prices recorded a modest rise on Friday, even as the market geared for a slight weekly decline.
Brent crude rose by 50 cents to trade at $70.02 per barrel, while U.S. West Texas Intermediate (WTI) climbed 61 cents to $68.15 per barrel.
Despite the uptick, both benchmarks were on course to finish the week with marginal losses of 0.5% and 0.4%, respectively, as per Reuters.
The market remained cautious as investors evaluated the implications of the European Union’s 18th sanctions package targeting Russia’s energy sector in response to the ongoing war in Ukraine.
Under the new measures, the G7’s price ceiling for Russian crude was revised downward to $47.6 per barrel, according to diplomatic sources cited by Reuters.
“Neither the price cap for Russian oil nor adding shadow fleet tankers on a sanction list managed to disrupt Russian oil exports so far, so the market remains sceptical of the impact of the latest sanctions,” UBS analyst Giovanni Staunovo noted.
Attention is also focused on the potential for further measures from Washington. President Donald Trump recently warned of impending sanctions on countries continuing trade with Moscow unless a peace deal is reached within 50 days.
“Ultimately, it is now a matter of waiting for possible major changes in U.S. sanctions and tariff policy,” said analysts at Commerzbank in a client note.
Meanwhile, oil markets reacted sharply to geopolitical tensions in Iraqi Kurdistan, where drone strikes disrupted over half of the region’s oil output. The attacks caused production to fall from 280,000 barrels per day (bpd) to approximately 130,000 bpd.
“The attacks are bound to take their toll as the region’s output has been slashed,” said PVM analyst Tamas Varga.
Though responsibility for the strikes remains unclear, officials have pointed to Iran-backed militia groups. Iraq’s federal authorities, however, have pledged to resume crude exports through a Turkey-bound pipeline that had been dormant for two years.
