Doha: Oil prices climbed about 1% on Friday, settling at a two-week high, as the intensifying war in Ukraine last week boosted the market’s geopolitical risk premium. Brent futures rose 94 cents, or 1.3%, to settle at $75.17 a barrel.
US West Texas Intermediate (WTI) crude rose $1.14, or 1.6%, to settle at $71.24, noted Al-Attiyah Foundation in its Weekly Energy Market Review.
Both crude benchmarks were up about 6% for the week, their highest settlements since November 7 as Moscow stepped up its Ukraine offensive after Britain and the US allowed Kyiv to strike deeper into Russia with their missiles.
President Vladimir Putin said Russia would keep testing its new Oreshnik hypersonic missile in combat and had a stock ready for use.
Russia fired the missile into Ukraine, prompted by Ukraine’s use of US ballistic missiles and British cruise missiles to hit Russia.
The US, meanwhile, imposed new sanctions on Russia’s Gazprom bank as President Joe Biden stepped up actions to punish Moscow for its invasion of Ukraine before he leaves office on Jan. 20.
The Kremlin said the new US sanctions were an attempt by Washington to hinder the export of Russian gas, but noted that a solution would be found.
Meanwhile, China, the world’s biggest oil importer, announced policy measures to boost trade, including support for energy product imports, amid worries over US President-elect Donald Trump’s threats to impose tariffs, while analysts expect China crude oil imports to rebound this month.
Asian spot liquefied natural gas (LNG) prices rose last week to their highest level of the year so far, tracking gains in European gas and amid colder temperatures in both regions.
The average LNG price for January delivery into northeast Asia rose to $14.60 per million British thermal units (mmBtu), industry sources estimated.
Last week’s further escalations between Russia and Ukraine have returned a steep risk premium to European gas and by default Asia’s market, despite actual gas supplies being uninterrupted, analysts said.
European benchmark gas prices at the Dutch TTF hub have been trading at one-year highs on concerns over Russian gas supply and as cold temperatures reduced gas stockpiles.
In the US, gas futures fell 6% Friday amid volatile trading, as rising prices spurred increased production and forecasts predicted milder weather. The price was still up 11% for the week.
