After tumultuous trading this week, oil prices established a floor above $100 a barrel on Friday, indicating that there is no easy replacement for Russian barrels in sight in a market already characterised by restricted supply.
Brent crude futures were down 27 cents, or 0.3 percent, at $106.37 a barrel as of 1356 GMT, after soaring over 9% on Thursday, the greatest percentage advance since mid-2020.WTI crude futures in the United States were up 17 cents, or 0.2 percent, at $103.15 a barrel, following an 8 percent gain on Thursday.
After trading in a $16 range, both benchmark contracts were expected to end the week down around 6%. Prices touched 14-year highs over two weeks ago, prompting profit-taking.
“President Putin is adamant about not ending the war. This should keep the energy complex well supported, with plenty of room for further volatility “Stephen Brennock, a PVM oil market analyst, stated.
After the Federal Reserve hiked interest rates for the first time since 2018, and laid out an aggressive plan to push borrowing prices to restrictive levels next year, he also said higher US interest rates indicated to a stronger US economy, which might underpin oil demand.
Meanwhile, the OPEC+ producing group’s output in February fell short of objectives by even more than the previous month, according to reports, and the International Energy Agency warned that oil markets might lose three million barrels per day (bpd) of Russian oil starting in April.
On-land product stocks in major countries are 39.9 million barrels lower for this time of year than the 2017-2019 average, according to consultancy FGE.