Oil prices rebounded on Friday, recovering some of the losses from the previous session, fueled by fading hopes of a quick resolution to the Ukraine conflict that could bring back more Russian energy supplies.
Brent crude futures rose by 46 cents, or 0.7%, to $70.34 a barrel by 0406 GMT, after settling 1.5% lower on Thursday. U.S. West Texas Intermediate crude increased by 48 cents, or 0.7%, to $67.03 a barrel, following a 1.7% decline on Thursday.
Russian President Vladimir Putin indicated support for a U.S. ceasefire proposal in Ukraine but added several conditions, making a swift end to the war less likely. “Russia’s tepid support for the 30-day ceasefire proposal has reduced confidence in a quick resolution,” said IG market analyst Tony Sycamore. “The U.S. is unlikely to lift sanctions until a ceasefire is agreed.”
Meanwhile, the global trade tensions, exacerbated by U.S. President Donald Trump’s threat of a 200% tariff on alcohol imports from Europe, raised concerns about a potential economic slowdown. The International Energy Agency (IEA) warned that global oil supply could surpass demand by 600,000 barrels per day this year, driven by U.S. production growth and weaker-than-expected global demand.
“The macroeconomic conditions supporting oil demand have worsened, with escalating trade tensions,” the IEA stated, revising down its demand growth estimates for late 2024 and early 2025.
While the trade war and demand worries weighed on oil prices, reduced Russian oil supply in the near term provided some support during Friday’s trading. “Short-term projections were mostly bearish, but geopolitical tensions could still disrupt supply,” ANZ analysts noted.