Oil Prices Edge Higher over Tight Supply Concerns
Oil prices edged higher on Friday as Western sanctions on Russia continued to tighten supply and fuel geopolitical uncertainty, though weak demand signals capped further gains.
International benchmark Brent crude was trading at $63.75 per barrel, up around 0.66% from the previous close of $63.33. The US benchmark West Texas Intermediate (WTI) also increased by about 0.74% to $59.83, compared to $59.39 in the prior session.
Switzerland-based oil trading company Gunvor Group announced that it has withdrawn its offer to purchase the international assets of Russian energy company Lukoil.
In a statement emphasizing that Gunvor has operated with transparency and kept its distance from the Russian market for the past decade, the company said, Gunvor has ceased trading in compliance with sanctions, sold its Russian assets, and publicly condemned the war in Ukraine.
On Oct. 23, US President Donald Trump added Lukoil, Russia’s second-largest oil producer, and its subsidiaries to the sanctions list, citing a “lack of serious commitment” to the peace process aimed at ending the war in Ukraine.
Experts say the sanctions, while disrupting oil supply to China and India, the world’s largest crude importers, are providing limited support to global prices.
However, they caution that the upward momentum in prices remains fragile, with expectations of an oversupply next year likely to continue weighing on the market. Concerns over slowing demand in the US also continue to put pressure on prices.
According to data from the US Energy Information Administration (EIA), US commercial crude oil inventories rose by about 5.2 million barrels last week to 421.2 million barrels, compared to market expectations of a 2.4 million-barrel decline. The unexpected increase in inventories reinforced perceptions of weak demand.
Oil prices also remained under pressure amid concerns over the potential impact of a federal government shutdown on the broader US economy, which could dampen consumption and further weigh on fuel demand.
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