Crude oil prices headed for weekly loss, but remain above $100 a barrel

Oil prices on Friday were set for a second consecutive weekly loss but found a ground above $100 per barrel after volatile trading this week with no easy substitute for Russian oil available in a market already facing supply shortage.

Brent crude futures slipped 29 cents or 0.3% to $106.35 per barrel by 12.45 GMT, after surging around 9% on Thursday in the biggest percentage gain since mid-2020.

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US West Texas Intermediate (WTI) crude futures were up 8 cents or 0.1% at $103.06 per barrel, adding to an 8% hike on Thursday.

Both benchmark contracts were set to close the week with over 5% losses, after having traded in a $16 range. Nearly two weeks ago, prices reached their highest levels since 2008, encouraging bouts of profits since then.

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According to a Reuters report, the supply shortage with traders avoiding Russian barrels, stalled nuclear talks with Iran, dwindling oil stocks and fears about a surge in COVID-19 cases in China, crude prices have been on a roller coaster ride. The volatility has scared players away from the oil market, which is likely to make price swings worse.

After the fourth day of talks with Ukraine that earlier in the week showed some signs of progress, Russia said it had yet to reach an agreement.

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According to PVM oil market analyst Stephen Brennock, “President Putin appears unwilling to end hostilities. This should ensure that the energy complex remains well supported with plenty of scope for further volatility.”

Additionally, he said rising interest rates point to a stronger economy in the United States, which could fuel oil demand after the Federal Reserve raised interest rates for the first time since 2018 on Wednesday and laid out an aggressive plan to push borrowing costs up aggressively next year.

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While OPEC+ output in February undershot targets even more than in January, sources said, the International Energy Agency said oil markets could lose three million barrels per day of Russian oil by April.

On-land product stocks in key countries are 39.9 million barrels lower this time of the year than they were for the duration of the 2017-2019 average, according to consultancy FGE.