Oil prices climbed nearly 1% on Friday to hit a two-week high as the intensifying war in Ukraine this week increased the market’s geopolitical risk premium.
Brent futures rose 94 cents, or 1.3%, to $75.17 a barrel. WTI crude added $1.14, or 1.6%, to $71.24.
Both crude indexes rose nearly 6% for the week and closed at their highest since Nov. 7, as Moscow stepped up its Ukraine offensive after Britain and the United States allowed Kyiv to launch missiles long distance, deeper into Russia.
The Russia-Ukraine escalation has raised geopolitical tensions beyond levels seen in the Middle East conflict between Israel and Iranian-backed militants.
Russia will resume hypersonic missile tests in the war. Putin said Russia would continue to test its new Oreshnik hypersonic missile in combat and had a stockpile ready for use.
Russia took the decision and is implementing it after Ukraine used US ballistic missiles and British cruise missiles to strike Russia.
The market fears that the escalating spiral war destruction may affect any part of the oil, gas, and refinery could affect supply.
Meanwhile, the US imposed new sanctions on Gazprombank as Russia stepped up its actions. The Kremlin said the new US sanctions were Washington’s attempt to block Russian gas exports, but that a solution would be found.
The US also banned food, metals, and other imports from about 30 more Chinese companies over alleged forced labour involving Uyghurs.
China, the world’s largest oil importer, announced policy measures this week to boost trade, including support for energy imports, amid concerns over US President-elect Donald Trump’s threats to impose tariffs.
Analysts expect China’s crude imports to recover in November. India, the world’s third-largest oil importer, also saw oil imports rise as domestic consumption rose, government data showed.
Eurozone business activity, which has been weighing on prices on Friday, deteriorated surprisingly sharply this month as the bloc’s dominant services sector contracted and manufacturing fell deeper into recession.
In contrast, the U.S. Composite PMI Output Index rose to its highest level since April 2022, with the services sector accounting for most of the gain, analysts said.
But those business activity indicators moved in opposite directions in the United States and Europe, with the U.S. dollar jumping to a two-year peak against a basket of other currencies.
A stronger dollar makes oil more expensive in other countries, which in turn dampens demand.
The economy in Germany, Europe’s largest economy, grew less than previously estimated in the third quarter, the statistics office reported on Friday.
