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The push toward $100/bbl oil had seemed to be slowing this week, but reports on Friday that the U.S. believes Russia’s Vladimir Putin could invade Ukraine “any day now” lifted crude to as high as $95/bbl and an eighth straight weekly advance.
“The oil market was waiting for a major catalyst to justify a move above $100, and it seems the Ukraine situation just took a turn for the worse,” Oanda’s Ed Moya said, adding that any crude supply disruption expectations could send the price another 10% higher.
Brent crude (CO1:COM) for April delivery closed +3.3% at $94.44/bbl, up 1.3% for the week and the highest finish for a front-month contract since September 2014, while March WTI (Cl1:COM) crude settled +3.6% at $93.10/bbl, up 0.9% for the week and also the best level September 2014.
Crude also was helped after the International Energy Agency warned that signs of a shortfall in OPEC+ production were worsening, as the alliance produced 900K bbl/day below target in January.
But the number of oil drilling rigs in the U.S. soared by 19 in the latest week to a 22-month high 516, the biggest weekly increase since before the pandemic began nearly two years ago; weather may have played a factor as rigs reactivated after cold weather.
Also, the U.S. and Iran may be making progress toward a nuclear deal, as talks resumed in Vienna on Tuesday, and such a deal “would be a game-changer, potentially pushing the global petroleum market into a surplus,” according to Bank of America analysts.
The energy sector (NYSEARCA:XLE) again topped the weekly leaderboard, +2.2%.
The week’s top 5 gainers in energy and natural resources: BTU +30.5%, CEIX +29.4%, GNE +23.3%, SQM +21%, NEX +20.3%.
The week’s top 5 decliners in energy and natural resources:MSB -26.8%, NGL -18.9%, FLNC -13.7%, GEOS -13.2%, FET -12.7%.
Source: Barchart.com