Oil prices rose approximately 1% on Friday and reached a two-week peak as increasing tension in the Ukraine war recently increased the geopolitical risk premium of the market. A gain of $0.94 or 1.3% was achieved by Brent futures and it closed at $75.17 per barrel. The U.S. West Texas Intermediate (WTI) crude increased by $1.14 or 1.6% to later finish at $71.24.
Both the crude benchmarks saw a rise of around 6% for the week marking the highest closing prices since November 7, following Moscow’s intensified offensive in Ukraine after the U.S. and Britain allowed Kyiv to launch strikes deeper into the Russian territory with their missile system.
As per Saxo Bank analyst Ole Hanson, the escalation between Russia and Ukraine has increased the geopolitical tension beyond those that were observed during the protracted conflict that involved Israel and Iran-backed groups. Vladimir Putin, Russian president stated that Russia would continue to test its new Oreshnik hypersonic missile in a combat environment and had a stockpile already prepared for deployment.
In response to the use of U.S. ballistic missiles by Ukraine and British cruise missiles to target Russia, Moscow has launched the missile into Ukraine. John Evans, a PVM analyst noted that the potential for accidental destruction in any gas, oil and refining infrastructure is a major concern of the market that could lead to long-term damage.
The U.S. has also prohibited food, metals and other imports from around 30 more Chinese entities and China which has been recognized as the largest oil importer globally, has announced several policy initiatives this week to promote trade that also consists of support to energy product imports in the the light of corers regarding Donald Trumps’ threats to impose tariffs. As per analysts, traders and shipping data, it is expected that China’s crude oil imports could recover in November.
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