Oil extends rally jumps as Russia-Ukraine talks stall
Oil prices continued to rally on Friday at the end of the third volatile trade week, after weak progress in peace talks between Russia and Ukraine raised the possibility of tighter sanctions and prolonged oil supply cuts.
The volatility scares players from the oil market, which will likely increase price volatility.
Russian President Vladimir Putin has shown little sign of easing, despite Western sanctions. The fourth day of talks between Russian and Ukrainian negotiators took place via video link, but the Kremlin said no agreement had yet been reached.
Brent crude futures rose $2.75, or 2.6%, to $109.39 a barrel at 0405 GMT after posting the biggest percentage gain since mid-2020, up nearly 9% on Thursday.
West Texas Intermediate (WTI) crude futures rose $2.93, or 2.9%, to $105.91 after seeing an 8% gain on Thursday.
Despite the rebound, both benchmark contracts are well on their way to closing the week down around 3% after trading in the $16 range. Prices fell from the 14-year high seen nearly two weeks ago. The volatile market is expected to continue, there is a lot of uncertainty.
The rally continues as the supply shrinkage caused by the sanctions against Russia, the disruption of nuclear talks with Iran, the decrease in oil stocks, and the increase in the COVID-19 cases in China raise the concerns that the demand may not be met.
A buyout was sparked on Thursday after a Kremlin spokesman's false comments were realized and Biden branded Putin a "war criminal".
The inadequacy of balancing the supply gap caused by Russian oil export losses and the persistence of this situation raises concerns. US Secretary of State Blinken is said to be preparing to visit the UAE and Saudi Arabia later this month, and the oil demand issue will likely be high on the agenda.
Experts say stockpiles of land products in key countries are 39.9 million barrels per year lower than the 2017-2019 average for this time of year, and also 45 million barrels per year.
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