Oil closes sharply higher and advances more than 20% in the week, with a focus on Ukraine

Oil had a strong advance this Friday (4), repeating the movement of most of the rest of the week. Fears that the global oil supply will be even tighter due to the conflict between Russia and Ukraine dominate the trading desks of energy commodity negotiators.

With Friday’s high, oil accumulated a weekly gain of more than 20% in the most liquid contracts in New York and London.

On the New York Mercantile Exchange (Nymex), a barrel of WTI oil due for delivery in April rose 7.44% on Friday ($8.01) and 26.30% on the week to 115.68. Brent, on the other hand, advanced 6.93% in Friday’s session (US$ 7.65) and 25.49% in the accumulated weekly, at US$ 118.11, on the Intercontinental Exchange (ICE).

This week’s cumulative advance is the biggest since the beginning of April 2020, when oil also had its biggest daily advance in history after the Organization of Petroleum Exporting Countries and allies (OPEC+) signaled for cuts in supply shortly after the shock of the Covid-19.

After a second round of talks between Russian and Ukrainian representatives failed to reach a ceasefire agreement on Thursday, Kremlin officials have again signaled that Russia will not withdraw its troops from Ukraine anytime soon, or at least. until you reach your goals.

This Friday, the United Nations Security Council met again to discuss the crisis, in particular the bombing of a nuclear plant in Ukraine, the largest in all of Europe.

In addition to the Ukrainians, the US, France and the UK criticized the Russians, while the Chinese insisted on calling for an end to the war. Russia has claimed that the West spreads lies about the military operation in Ukraine.

The day was also marked by the adoption of more measures to isolate the Russian economy. Among them, the US Commerce Department applied more export controls to the Russian oil refining sector.

In the private sector, S&P Dow Jones Indices announced the removal of Russian stocks from its New York indexes and reclassified the country from “emerging” to “standalone”.

In the assessment of Capital Economics, “oil has room to rise even further if the West decides to impose sanctions on Russian production of energy commodities”.

At the same time, OPEC+’s apparent lack of concern about global supply, after the cartel went ahead with its plan to add 400,000 barrels a day monthly, “added more flames” in the market, the consultancy says in a report.