Oil Updates - crude heads for weekly gain on supply jitters

21/02/2025 10:19 AST

Oil prices fell on Friday but were still poised for a weekly gain on supply disruption in Russia while uncertainty looms over a potential peace deal in Ukraine.

Brent futures slipped by 73 cents, or 0.95 percent, to $75.75 a barrel by 2:04 p.m. Saudi time, while US West Texas Intermediate crude lost 73 cents, or 1 percent, to $71.75.

Both have gained about 1.4 percent this week - the largest weekly advance since early January. Brent would be marking a second week of gains after three weeks of declines. WTI is set for its first week of gains after four weekly declines.

The market has taken a relatively neutral yet nervous stance on crude oil prices, said Ole Hansen at Saxo Bank, with Brent trading near the middle of the expected range for the year, between $65 and $85 a barrel.

Market focus was also on oil supply disruption.

Russia said Caspian Pipeline Consortium oil flows, a major route for crude exports from Kazakhstan, were reduced by 30 percent to 40 percent on Tuesday after a Ukrainian drone attack on a pumping station.

However, oil flows from Kazakhstan's Tengiz oilfield via CPC are uninterrupted, Russian news agency Interfax reported on Friday, citing Tengizchevroil.

Kazakhstan has pumped record high oil volumes despite damage to its CPC export route via Russia, industry sources said on Thursday. It was not immediately clear how Kazakhstan had been able to pump record volumes.

Relations between Ukraine President Volodymyr Zelensky and US President Donald Trump deteriorated this week after Zelensky criticized US and Russian moves to negotiate a peace deal without Kyiv's involvement. The rift was widened by Trump comments blaming Ukraine for starting the three-year-old conflict.

Trump denounced Zelensky as "a dictator without elections" on Wednesday after Zelensky said Trump was trapped in a Russian disinformation bubble, a response to the US president suggesting Ukraine had started the war.

"Any immediacy of an ending to the war is disappearing and so are oil trading positions driven by an idea of a Russian future without sanctions," said PVM analyst John Evans.

But after a meeting with Trump's envoy for the Ukraine conflict on Thursday, Zelensky said Ukraine was ready to work quickly to produce a strong agreement with the US on investments and security.

Pressuring crude prices on Friday was a rise in US crude oil stockpiles while gasoline and distillate inventories fell last week as seasonal maintenance at refineries led to lower processing, the Energy Information Administration said on Thursday.

On the demand front, JPMorgan analysts expect cold weather in the US and a post-holiday increase to industrial activity in China to contribute more demand in the coming week.