Oil prices posted a weekly gain, supported by escalating geopolitical risks, a sharper-than-expected drop in US crude inventories, and renewed optimism over global trade talks.
Brent crude was trading at $64.80 per barrel at 12:40 p.m. local time (0940 GMT) on Friday, up roughly 3.5% from last week's close of $62.60.
Similarly, West Texas Intermediate (WTI) stood at $62.38 per barrel, also up about 3.5% from last Friday’s close of $60.28.
Prices began the week on a positive note after Ukraine’s Security Service (SBU) claimed responsibility for a major drone strike on Russian military airfields, reportedly destroying nearly 34% of Russia’s strategic bombers. The operation, dubbed "Spider Web," reportedly caused an estimated $7 billion in damage.
As the conflict escalated, market attention shifted to peace talks between Kyiv and Moscow in Istanbul. However, speculation over possible new US sanctions on Russia fueled concerns about supply disruptions, further supporting the upward price trend.
Despite the geopolitical boost, prices came under pressure midweek as markets reacted to President Trump’s aggressive trade stance.
Prices rebounded midweek following a larger-than-expected draw in US commercial crude inventories. According to the US Energy Information Administration (EIA), inventories fell by 4.3 million barrels, signaling stronger demand and supporting oil prices.
Investor sentiment also improved amid growing expectations that the US Federal Reserve could begin cutting interest rates as early as July. Lower borrowing costs and a weaker dollar are typically supportive of oil, boosting the appeal of dollar-denominated commodities.
On the other hand, oil prices declined due to concerns that Trump's decision to double tariffs on steel and aluminum imports from 25% to 50% could stoke inflation and dampen global oil demand.
The European Union strongly opposed the move, signaling possible retaliatory measures, while the OECD cut its 2024 global growth forecast from 3.1% to 2.9% amid ongoing trade uncertainty.
Meanwhile, investor caution grew as the US labor market showed signs of strain, with markets closely monitoring key indicators for further clues on demand strength.
Oil prices dipped slightly on Friday but managed to retain most of their weekly gains. While global demand concerns and geopolitical tensions weighed on sentiment, renewed US-China trade talks and signs of OPEC+ coordination helped stabilize the market.
Eight OPEC+ countries, including core members and allied producers, agreed to raise output by 411,000 barrels per day in July.
At the same time, new US sanctions on Russia and stalled nuclear talks with Iran added further uncertainty to the supply outlook.
Despite intermittent pressure from demand concerns and trade volatility, oil prices remained supported by supply-side risks and geopolitical tensions.
By Humeyra Ayaz
Anadolu Agency