Oil prices closed mixed on Friday as investors expected potential supply disruption from the Russia-Ukraine crisis and a surge in Iran’s oil exports.
Brent crude futures were up 57 cents, or 0.6%, at $93.54 a barrel. West Texas Intermediate (WTI) crude was down 69 cents, or 0.5%, at $91.07 a barrel. US markets will be closed on Monday for the Presidents Day holiday.
Both benchmarks hit their highest levels since September 2014 on Monday, but rising expectations for the easing of oil sanctions on Iran put pressure on the market.
Brent posted a small 0.9% gain in its ninth-week earnings, while WTI fell 1.7%, stayed on its eight-week gain.
Fears about possible supply disruptions stemming from Russia’s military presence on Ukraine’s borders limited losses this week. The West has threatened Russia, its biggest supplier of oil and gas, with new sanctions if it attacks Ukraine.
Russia denies allegations that it is planning an attack.
Italian Prime Minister Mario Draghi said that any sanctions that could be imposed on Russia by the European Union should not include energy imports.
The oil market rose slightly in after-hours trading after US President Joe Biden said he was convinced Russian President Vladimir Putin had decided to invade Ukraine in the coming days.
It is said that a US-Iranian agreement to revive Iran’s 2015 nuclear deal with world powers is imminent, but success depends on the political will of the participants. But diplomats said the shaped deal lays out stages of mutual steps to bring both sides into full compliance, and that the first does not include waiving oil sanctions.
As a result, analysts said there is little chance of Iranian crude returning to the market in the near future to ease the current supply tightness.
Reflecting tightness in global oil supply, the six-month backwardation in Brent broke its widest record on Wednesday. Backwardation, is a market structure that occurs when short-term delivery contracts are priced higher than subsequent months.
Sources close to the group have said the Organization of the Petroleum Exporting Countries and its allies, including Russia, will work to include Iran in the oil production deal if Tehran and world powers agree to revive the nuclear deal.
Baker Hughes said US drillers added four oil rigs this week, rising to 520 as an indicator of future production, the highest level since April 2020.