Putin has proposed changes to the U.S. idea of a ceasefire in Ukraine. Oil prices rose 1% on Friday to end the week almost unchanged as the prospect of a quick end to the Ukraine war and more Russian energy supplies to Western markets wanes.
Brent crude futures settled at $70.58 a barrel, up 70 cents, or 1%, after falling 1.5% in the previous session. WTI closed at $67.18 per barrel, up 63 cents, or 1%, after falling 1.7% on Thursday.
Both indexes finished the week little changed from last week’s close at $70.36 and WTI at $67.04.
Brent has been hovering around $70 for the past two weeks. Whether it stays at that level next week depends on geopolitical developments.
Putin said on Thursday that Moscow supported the US proposal for a ceasefire in Ukraine in principle, but that a quick end to the conflict was difficult and dependent on a series of explanations and conditions.
Trump on Friday again called on Russia to accept the ceasefire proposal, saying it would save the US from a real mess with Russia.
If the prospect for a ceasefire continues to be pushed into the future, the market would price Russian oil to be under sanctions for an extended period of time.
The Trump administration said a license allowing energy transactions with Russian financial institutions expired this week.
The sources said Chinese state companies were also restricting Russian oil imports because of sanctions risks.
China and Russia sided with Iran after the US demanded nuclear talks with Tehran. Senior Chinese and Russian diplomats said dialogue should only start on “mutual respect” basis and that all sanctions should be lifted.
In the short term, most price projections are downward, but geopolitical tensions could cause supply disruptions, and supply disruptions are limiting the downward price trajectory.
Unstable macroeconomic conditions caused by escalating trade tensions between the US and other countries led the IEA to cut its demand growth forecasts for the last quarter of 2024 and the first quarter of this year.
The International Energy Agency (IEA) warned on Thursday that global oil supplies could exceed demand by around 600,000 barrels per day this year due to growth led by the US and weaker global demand.
High demand risks and rising supply from OPEC+ are posing serious resistance to a sustained recovery in oil prices.
Baker Hughes says the number of oil rigs in the US, which provides an idea of future demand, increased by one this week.
