Crude oil prices fell by nearly 3% on Friday, marking an overall weekly decline, as investors reacted to reduced geopolitical risk in the Middle East and uncertainty surrounding a potential peace deal in Ukraine.
Brent futures closed down by $2.05 or 2.68%, at $74.43 per barrel, while U.S. West Texas Intermediate (WTI) dropped $2.08 or 2.87%, settling at $70.40 per barrel. On a weekly basis, Brent recorded a 0.4% loss, while U.S. crude declined by 0.5%.
Analyst John Kilduff of Again Capital in New York told CNBC that a risk-averse sentiment prevails, as relative calm continues in the Middle East following the maintenance of the ceasefire in Gaza.
Additionally, investors are assessing the increase in U.S. crude inventories, which was announced on Thursday by the Energy Information Administration (EIA), attributing the development to reduced processing due to seasonal refinery maintenance.
At the same time, U.S. energy companies added new oil and gas drilling rigs for the fourth consecutive week, bringing the total to 592—the highest level since June—according to Baker Hughes.
Supply Disruptions Limit Losses
Despite the downward trend, concerns over supply disruptions helped cap losses.
Russia reported that oil flows through the Caspian Pipeline Consortium (CPC)—a key crude export route from Kazakhstan—dropped by 30-40% on Tuesday following a Ukrainian drone attack on a pumping station.
However, Russian news agency Interfax reported on Friday that oil flows from Kazakhstan’s Tengiz field through the CPC remained unaffected, while industry sources indicated that Kazakhstan achieved record oil production despite damage along its export route via Russia.
On the demand front, JPMorgan analysts predict that cold temperatures in the United States and increased industrial activity in China after the holidays will boost oil demand in the coming week.
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