Mumbai, 18 Jan (Commoditiescontrol): Oil prices fell on Friday but managed to secure their fourth consecutive weekly rise, fueled by ongoing concerns about supply disruptions following new U.S. sanctions on Russian energy trade.
Brent crude futures declined by 50 cents, or 0.6%, to close at $80.79 per barrel, achieving a 1.3% gain for the week. Similarly, U.S. West Texas Intermediate (WTI) crude dropped 80 cents, or 1%, to settle at $77.88 per barrel, marking a 1.7% weekly increase.
The Biden administration expanded sanctions on Russian oil producers and tankers last week, intensifying worries about restricted energy supplies. Investors are also watching developments surrounding President-elect Donald Trump’s return to the White House on Monday. His nominee for Treasury secretary has hinted at stricter sanctions on Russian oil.
Adding to the bullish sentiment, money managers increased their net long positions in U.S. crude futures and options by 8,038 contracts to a total of 215,193, according to data from the U.S. Commodity Futures Trading Commission.
However, expectations of reduced tensions in the Middle East weighed on prices. Yemen’s Houthi militia is anticipated to halt its attacks on Red Sea shipping after a Gaza ceasefire agreement was approved by Israel's security cabinet. These attacks have significantly disrupted global shipping routes over the past year.
Earlier support for the oil market came from demand optimism. U.S. inflation data showed signs of easing, boosting hopes for potential interest rate cuts. In addition, China, the world’s largest oil importer, met its 5% growth target for 2024. However, government data revealed a decline in China’s oil refinery throughput, marking the first drop in over two decades, excluding the pandemic-hit year of 2022.
Meanwhile, Baker Hughes reported a decline in the U.S. oil rig count, with two fewer rigs bringing the total to 478, signaling potentially lower future production.
Looking ahead, a wave of Arctic air is expected to blanket much of the U.S. with subfreezing temperatures, likely increasing heating oil demand and affecting some production activities.
(By Commoditiescontrol Bureau: 09820130172)