By Adedapo Adesanya
Brent crude rose by 1.8 per cent or $1.43 on Friday to sell at $81.07 per barrel, posting its fourth consecutive weekly gain, buoyed by growing evidence of supply shortages in the coming months and rising tensions between Russia and Ukraine that could further hit supplies.
Also, the US West Texas Intermediate (WTI) crude appreciated by 1.9 per cent or $1.42 during the trading session to settle at $77.07 a barrel, recording nearly 2 per cent weekly growth.
Geo-political tension gripped the market as Russia hit Ukrainian food export facilities for a fourth day in a row on Friday and practised seizing ships in the Black Sea.
This is the latest development in an escalation of tensions in the region since Russia withdrew this week from a United Nations-brokered safe sea corridor agreement.
Market analysts noted that a shutdown of the grain corridor could hit supplies of ethanol and biofuels that are blended with oil products at a time when global grain markets are already tightening, which would lead to refiners using more crude oil.
The seizure of ships could also add risks to oil and other goods exports in the region.
The Kremlin, which is the office of the Russian president, on Friday, said Ukraine’s actions posed a danger to civilian shipping in the Black Sea, and the situation around Russian exports requires analysis.
The disruption coupled with tight supply gave the market the boost going into the weekend.
Crude inventories in the US fell last week amid a jump in crude exports and higher refinery utilisation, the Energy Information Administration (EIA) said on Wednesday.
Earlier on Monday, the EIA had forecast that US shale oil and gas production was likely to decline in August for the first time this year, adding to concerns about supply tightness.
Meanwhile, US energy firms this week reduced the number of oil rigs by seven, their biggest cut since early June, energy services firm Baker Hughes said. At 530, the US oil rig count, an early indicator of future output, is at its lowest since March 2022.
UAE Energy Minister Suhail al-Mazrouei told Reuters that current actions by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to support the oil market were sufficient for now.
He added the group was “only a phone call away” if any further steps were needed.
Chinese authorities unveiled plans to help boost sales of automobiles and electronics, a move welcomed by investors hoping that it would reinvigorate the country’s sluggish economy.
China has been touted as the main driver of oil demand this year, but underwhelming data has put the expectations in check.
Dipo Olowookere