Oil extends gains on strong US demand hopes, Russia supply concerns
- By Reuters -
- Feb 21, 2025
Oil prices extended gains on Friday, headed for a weekly increase, as falling inventories of U.S. gasoline and distillate raised expectations of solid demand while concerns over supply disruptions in Russia lent support.
Brent futures climbed 16 cents, or 0.2%, to $76.64 a barrel by 0123 GMT. U.S. West Texas Intermediate crude edged up 17 cents, or 0.2%, to $72.65.
Both benchmarks were set for a weekly gain of about 3%.
U.S. crude oil stockpiles rose while gasoline and distillate inventories fell last week as seasonal maintenance at refineries led to lower processing, the Energy Information Administration said on Thursday.
“Drawdowns of U.S. gasoline and distillate stockpiles, along with concerns over tight supplies in Russia, are supporting oil prices,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“Expectations for a potential peace deal between Russia and Ukraine, which could ease sanctions on Moscow, have faded somewhat due to Ukraine’s hardened stance, prompting some investors to buy back into the market,” he added.
Ukraine President Volodymyr Zelenskiy earlier in the week was enraged by U.S. and Russian moves to negotiate a peace deal without Kyiv and comments by U.S. President Donald Trump blaming Ukraine for starting the three-year-old conflict with Moscow.
However, following a meeting with Trump’s envoy for the Ukraine conflict on Thursday, Zelenskiy said Ukraine was ready to work quickly to produce a strong agreement on investments and security with the United States.
U.S. Treasury Secretary Scott Bessent told Bloomberg Television on Thursday that Russia could win some relief from U.S. sanctions based on its willingness to negotiate an end to its war in Ukraine.
Meanwhile, disruptions to oil supply continued to keep prices elevated.
Russia said Caspian Pipeline Consortium oil flows, a major route for crude exports from Kazakhstan, were reduced by 30%-40% on Tuesday after a Ukraine drone attack on a pumping station.
Still, Kazakhstan has pumped record high oil volumes despite damage on its main export route via Russia, the Caspian Pipeline Consortium (CPC), industry sources said on Thursday. It was not immediately clear how Kazakhstan had been able to pump record volumes given output increases need to correspond with export pipeline capacity.