Oil prices extended their gains on Friday, heading for a weekly increase as falling inventories of U.S. gasoline and distillates sparked expectations of sustained demand. Concurrently, concerns about supply disruptions in Russia further supported the market.
By 0123 GMT, Brent crude futures had climbed by 16 cents, or 0.2%, reaching $76.64 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by 17 cents, or 0.2%, to $72.65. Both benchmarks were on track for a weekly gain of approximately 3%.
The Energy Information Administration (EIA) reported on Thursday that U.S. crude oil stockpiles had increased, while gasoline and distillate inventories fell last week. This decline in refined product stocks was attributed to seasonal refinery maintenance, which reduced processing levels.
Toshitaka Tazawa, an analyst at Fujitomi Securities, highlighted that “drawdowns in U.S. gasoline and distillate stockpiles, combined with concerns over tight supplies in Russia, are supporting oil prices.”
Further complicating the situation, expectations for a potential peace deal between Russia and Ukraine, which could ease sanctions on Moscow, have diminished due to Ukraine’s hardened stance. This shift has prompted some investors to re-enter the market.
Earlier this week, Ukrainian President Volodymyr Zelenskiy expressed anger over U.S. and Russian efforts to negotiate a peace deal without Kyiv’s involvement, along with U.S. President Donald Trump’s comments blaming Ukraine for the ongoing conflict. However, after meeting with Trump’s envoy for the Ukraine conflict on Thursday, Zelenskiy indicated that Ukraine was open to swiftly reaching a solid agreement on investments and security with the United States.
U.S. Treasury Secretary Scott Bessent also spoke on Thursday, suggesting that Russia could receive relief from U.S. sanctions if it demonstrates a willingness to negotiate an end to the war in Ukraine.
Meanwhile, disruptions to oil supply continued to support higher prices. Russia reported a 30%-40% reduction in Caspian Pipeline Consortium oil flows, a key export route for Kazakh crude, following a drone attack on a pumping station in Ukraine.
Despite these supply challenges, Kazakhstan has managed to achieve record-high oil production levels, even with damage to its primary export route through the Caspian Pipeline Consortium (CPC). It remains unclear how Kazakhstan has managed to sustain these high output levels, given the constraints of export pipeline capacity.
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