WTI crude oil futures dipped below $72 per barrel but remained on track for a 1.5% weekly gain, supported by concerns over supply disruptions in Russia and an improving demand outlook.
Oil heads for weekly gain
The market reacted to reports that Russia experienced a 30%-40% reduction in Caspian Pipeline Consortium oil flows following a Ukrainian drone attack on a key pumping station, raising fears of prolonged supply constraints.
On the demand side, analysts anticipate that cold weather in the U.S. and a pickup in Chinese industrial activity will boost energy consumption in the coming weeks. In China, recent economic data has signaled increasing factory output and infrastructure activity, which could drive higher crude imports. Meanwhile, in the U.S., crude oil stockpiles rose, but gasoline and distillate inventories declined due to seasonal refinery maintenance, suggesting steady demand for refined products.
Geopolitical risks remain in focus
Geopolitical risks also remained in focus, particularly surrounding Ukraine peace negotiations. Tensions escalated earlier in the week when former President Donald Trump referred to Ukrainian President Volodymyr Zelensky as "a dictator without elections" and suggested Ukraine had initiated the war. The remarks sparked a sharp response from Kyiv, adding uncertainty to U.S.-Ukraine relations. However, after meeting with Trump’s envoy on Thursday, Zelensky stated that Ukraine was prepared to swiftly establish a strong investment and security agreement with the U.S., signaling an effort to maintain Western support.
Looking ahead, investors will continue to monitor developments in global crude supply, upcoming U.S. inventory reports, and shifts in geopolitical dynamics, all of which could influence oil prices in the near term.
