© Reuters. FILE PHOTO: Towers and Chimneys Are Silhouettes at Melbourne Oil Refinery June 21, 2010 REUTERS / Mick Tsikas / File Photo
Author: Arathy Somasekhar
(Reuters) -Oil futures rose on Friday, fueled by supply restrictions and concerns over Russia’s attack on neighboring Ukraine, pushing prices toward a fourth weekly rise despite sources saying China will release crude oil reserves around the lunar New Year.
futures rose $ 1.59, or 1.9%, to an almost 2-1 / 2-month high of $ 85.06 a barrel at 13:50 ET (1850 GMT). U.S. oil West Texas Intermediate gained $ 1.80, or 2.2%, to $ 83.93.
“People who look at the bigger picture understand that the global supply-to-demand situation is very tight and this gives the market a solid boost,” said Phil Flynn, senior analyst at Price Futures Group.
Flynn added that traders do not want to be short on the market because tensions have risen between Russia and Ukraine and ahead of a long American weekend for Martin Luther King Jr.’s holiday, which typically records lower trading volumes.
U.S. officials expressed fears Friday that Russia is preparing to attack Ukraine if diplomacy fails. Russia, which has gathered 100,000 troops on Ukraine’s border, has released pictures of its forces on the move.
“There has been an increase in the geopolitical risk factor that is raising prices,” said John Kilduff, a partner at Again Capital Management in New York City.
The dollar seemed to be heading for its biggest weekly decline in four months. A weaker dollar makes goods more affordable for owners of other currencies. [FRX/]
Several banks forecast oil prices of $ 100 a barrel this year, and demand is expected to exceed supply, not least because capacity constraints among OPEC + countries are in focus.
Libyan National Petroleum Corporation President Mustafa Sanallah said that “oil prices are expected to continue to rise unless market fundamentals change and global investment … does not rise”, adding that the country’s oil production is 1.045 million barrels per day.
“When you consider that OPEC + is still not even close to meeting its overall quota, this narrowing cushion could prove to be the biggest factor for oil prices in the coming months,” said PVM analyst Stephen Brennock.
Issues also remain unresolved in indirect talks between Iran and the United States on reviving Iran’s 2015 nuclear deal, a source close to the talks said on Friday. If the United States lifts sanctions on Iran, that country could increase oil supplies, increasing global supplies.
Sources told Reuters that China plans to release oil reserves around the lunar New Year holidays between January 31 and February 6 as part of a plan coordinated by the United States with other major consumers to reduce global prices.
The U.S. Department of Energy said Thursday it has sold 18 million barrels of strategic waste.
U.S. oil platforms also rose 11 to 492 this week, the highest since April 2020.
China recorded its first annual drop in crude oil imports in two decades, although traders expect imports to recover this year.
Fuel demand has been under pressure in the world’s second-largest oil consumer as a variant of the Omicron coronavirus has spread. Many cities, including Beijing, have urged people not to travel during the Lunar New Year.