© Reuters. FILE PHOTO: Pump Jacks are seen at sunrise near Bakersfield, Calif. Oct. 14, 2014. REUTERS/Lucy Nicholson/File Photo
MELBOURNE (Reuters) – Oil prices extended their rally on Friday at the end of a third volatile week of trading as there was little progress in Russia-Ukraine peace talks, raising the specter of tougher sanctions and a prolonged oil supply disruption .
A speech by Russian President Vladimir Putin on Thursday warned “traitors and scum” at home who helped the West that they would be spat out like mosquitoes adding to market jitters over a protracted conflict.
futures were up $2.43, or 2.3%, to $109.07 a barrel at 0141 GMT, after rising nearly 9% on Thursday in the largest percentage gain since mid-2020.
US West Texas Intermediate (WTI) crude futures were up $2.75, or 2.7%, to $105.73 a barrel, contributing to an 8% jump on Thursday.
Despite the recovery, both benchmark contracts were expected to finish the week at around 4%, having traded in a range of $16. Prices have fallen from the 14-year high of almost two weeks ago.
“I still expect more volatility. There is still a lot of uncertainty,” said Justin Smirk, senior economist at Westpac in Sydney.
The supply crisis caused by sanctions against Russia, faltering nuclear talks with Iran, dwindling oil supplies and concerns about a wave of COVID-19 cases in China hitting demand all made for a rollercoaster ride of the week.
Analysts said Putin’s speech, comments from a Kremlin spokesman who said a report on major progress in peace talks was “wrong” and that US President Joe Biden calling Putin a “war criminal” all led to a wave of purchases on Thursday. led.
The volatility has scared players out of the oil market, which in turn is likely to exacerbate price swings, traders, bankers and analysts said.
“In such a tight market and such an illiquid paper market — you get some volatility,” Smirk said.
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