BENGALURU- Oil prices rose nearly 2 percent to record a fourth consecutive weekly gain, buoyed by growing evidence of supply shortages in the coming months and rising tensions between Russia and Ukraine that could further hit supplies.
Brent crude futures rose $1.43, or 1.8 percent, to settle at $81.07 a barrel, with a weekly gain of about 1.2 percent. US West Texas Intermediate crude ended $1.42, or 1.9 percent, higher at $77.07 a barrel, its highest since April 25. WTI gained nearly 2 percent in the week.
“The oil market is starting to slowly price in a looming supply crunch,” Price Futures Group analyst Phil Flynn said.
“Global supplies are starting to tighten and that could accelerate dramatically in the coming weeks. Increased war risk could also impact prices,” Flynn said.
Russia hit Ukrainian food export facilities for a fourth day in a row on Friday and practised seizing ships in the Black Sea, in an escalation of tensions in the region since Moscow’s withdrawal this week from a UN -brokered safe sea corridor agreement.
A shutdown of the grain corridor could hit supplies of ethanol and biofuels that are blended with oil products at a time that global grain markets are already tightening, which would lead to refiners using more crude oil, Flynn said.
The seizure of ships could also add risks to oil and other goods exports in the region, he added. The Kremlin on Friday said Ukraine’s “unpredictable” actions pose a danger to civilian shipping in the Black Sea, and the situation around Russian exports requires analysis.
