Oil prices climbed about 1 percent on Friday, settling at a two-week high, as the intensifying war in Ukraine boosted the market’s geopolitical risk premium.
Brent futures rose 94 cents, or 1.3 percent, to settle at $75.17 a barrel. US West Texas Intermediate (WTI) crude rose $1.14, or 1.6 percent, to settle at $71.24.
Both crude benchmarks were up about 6 percent for the week, their highest settlements since Nov. 7 as Moscow stepped up its Ukraine offensive after Britain and the US allowed Kyiv to strike deeper into Russia with their missiles.
“The Russia-Ukraine escalation has raised geopolitical tensions beyond levels seen during the year-long conflict between Israel and Iran-backed militants,” said Saxo Bank analyst Ole Hansen.
President Vladimir Putin said Russia would keep testing its new Oreshnik hypersonic missle in combat and had a stock ready for use. Russia fired the missile into Ukraine, prompted by Ukraine’s use of US ballistic missiles and British cruise missiles to hit Russia.
“What the market fears is accidental destruction in any part of oil, gas and refining that not only causes long-term damage but accelerates a war spiral,” said PVM analyst John Evans. The US, meanwhile, imposed new sanctions on Russia’s Gazprombank as President Joe Biden stepped up actions to punish Moscow for its invasion of Ukraine before he leaves office on Jan. 20.
