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At 11:36 GMT, Light Crude Oil Futures are trading $71.84, down $0.64 or -0.88%.
Supply Disruptions Add Support to Crude Prices
Oil prices dipped on Friday but remain on track for a weekly gain, driven by concerns over supply disruptions in Russia and a positive demand outlook in the United States and China. While Brent futures and U.S. West Texas Intermediate (WTI) crude both eased, they are up approximately 2% this week, marking the strongest weekly advance since early January.
The disruptions to oil supply have been a key focus. Russia reported that oil flows through the Caspian Pipeline Consortium—a critical route for Kazakhstan’s crude exports—were reduced by 30%-40% following a Ukrainian drone strike on a pumping station. Despite the damage, Kazakhstan managed to push record high oil volumes, although how this was achieved remains unclear.
U.S. Inventory Data Signals Mixed Supply Picture
The latest data from the U.S. Energy Information Administration showed a rise in crude oil stockpiles last week, while gasoline and distillate inventories fell. Seasonal maintenance at refineries contributed to lower processing levels. The drawdowns in U.S. gasoline and distillate stocks, alongside concerns over Russia’s supply, have provided underlying support to oil prices.
Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that expectations for a Russia-Ukraine peace deal had waned, contributing to renewed buying interest in the oil market. While earlier hopes of eased sanctions on Moscow softened, Ukraine’s hardened stance suggests geopolitical risk remains a market factor.
Demand Outlook Remains Strong in U.S. and China
On the demand side, global oil consumption has averaged 103.4 million barrels per day (bpd) through February 19, marking a 1.4 million bpd increase, according to JPMorgan analysts. They expect that colder weather in the U.S. and ramped-up industrial activity in China post-holidays could further boost demand in the coming weeks.
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