By Adedapo Adesanya
Crude oil prices climbed about 1 per cent on Friday as the intensifying war in Ukraine this week boosted the market’s geopolitical risk premium, with Brent gaining 94 cents or 1.3 per cent to settle at $75.17 a barrel and the US West Texas Intermediate (WTI) crude rising by $1.14 or 1.6 per cent to trade at $71.24 per barrel.
For the week, both crude benchmarks rose by 6 per cent as Russia stepped up its Ukraine offensive after Britain and the US allowed Ukraine to strike deeper into Russia with their missiles.
Market analysts warned that the Russia-Ukraine escalation has raised geopolitical tensions beyond levels seen during the year-long conflict between Israel and Iran-backed militants.
Russian President Mr Vladimir Putin said it would keep testing its new hypersonic missile in combat and had a stock ready for use.
Afterwards, Russia, an oil-producing country, fired the missile into Ukraine, prompted by Ukraine’s use of US ballistic missiles and British cruise missiles to hit Russia.
There are fears that there might be accidental destruction in any part of oil, gas and refining that causes long-term damage and worsens the war.
In a related development, the US imposed new sanctions on Russia’s Gazprombank as President Joe Biden stepped up actions to punish Russia for its invasion of Ukraine before he leaves office on January 20.
In response, the Russian government sidestepped the latest US sanction, saying it was an attempt to hinder the export of Russian gas, adding that it would find a solution to the challenge.
The market continues to weigh the latest move by China, the world’s biggest oil importer after it announced policy measures this week to boost trade.
Some of the measures include support for energy product imports, which came amid worries over US President-elect Donald Trump’s threats to impose tariffs on the country.
For China, there are signs that its crude oil imports will rebound in November.
Oil imports also increased in India, the world’s third-biggest oil importer, as domestic consumption increased.
Elsewhere, business activities took a surprisingly sharp turn for the worse this month in the Eurozone as the bloc’s dominant services industry contracted and manufacturing sank deeper into recession.
In contrast, S&P Global said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to the highest level since April 2022, with the services sector providing the bulk of the increase.
Meanwhile, the US Dollar jumped to a two-year high versus a basket of other currencies, making oil expensive for holders of other currencies.
Dipo Olowookere