Oil prices held steady on Friday as concerns about oversupply and weaker U.S. demand were counterbalanced by supply disruption risks from ongoing conflicts in the Middle East and Ukraine. By 0854 GMT, Brent crude futures rose 11 cents, or 0.2%, to $66.49 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 4 cents to $62.41.
The previous day, both Brent and WTI benchmarks had fallen by 1.7% and 2%, respectively.
A report from the International Energy Agency (IEA) on Thursday indicated that global oil supply would increase more rapidly than expected this year, driven by planned output increases from the OPEC+ group, which includes OPEC members and allies like Russia. However, OPEC’s own report maintained relatively high forecasts for oil demand growth this year and next, citing solid global economic growth.
Despite the risk of oil prices tumbling, factors such as tightness in the distillates market, ongoing buying from China to fill inventories, and potential sanctions on Russia, as well as secondary sanctions on its customers, are providing support to the market, according to John Evans, an analyst at PVM Oil Associates.
A drone attack on Russia’s Primorsk port, one of the largest oil and fuel export terminals, caused a fire on a vessel and a pumping station on Friday, escalating concerns about supply disruptions.
Meanwhile, India’s Adani Group, the country’s largest private port operator, has banned tankers sanctioned by Western nations from entering its ports, potentially limiting Russian oil supplies. India remains the largest buyer of Russian seaborne oil, much of it transported on tankers that are under sanctions by the European Union, United States, and Britain.
