As investors evaluated the uncertain prospects for a cease-fire in Ukraine and as the commodity surpassed a significant technical level, oil increased and ended the week on a positive note.
West Texas Intermediate increased 0.7% to close above $60 per barrel, indicating that there is still a risk premium as a peace agreement between Russia and Ukraine is still elusive.
Russia objected to several aspects of a US-backed plan on the second day of negotiations between Ukrainian negotiators and US officials in Florida.
As an anticipated market surplus begins to materialize, the market is keeping an eye on developments about a settlement that might reduce prices by perhaps lifting sanctions and increasing Russian oil shipments.
However, an agreement seems far off: Ukraine claimed responsibility for a nocturnal assault on the Temryuk harbor and Russia's Syzran refinery.
According to reports, Washington lobbied European nations in an attempt to thwart a proposal to utilize Moscow's frozen assets to support a sizable loan for Ukraine.
WTI on Friday ended above its 50-day moving average, a crucial level of support for the commodity, adding to the bullish trend.
Algorithmic traders covering some of their short bets in recent sessions have also helped prices, and analysts predict that more purchasing may occur in the upcoming weeks.
According to Dan Ghali, a commodity strategist at TD Securities, "this session should mark the first notable short covering program since algo selling activity exhausted itself, and the bar is low for subsequent CTA buying activity to hit the tapes over the coming week."
Oversupply is driving down prices worldwide in response to geopolitical threats. While Canadian oil has plummeted, Saudi Aramco will cut the price of its flagship Arab Light crude grade to its lowest level since 2021 for January. Additionally, Baker Hughes reports that the number of crude oil rigs in the US increased by six during the previous week.
