By Myra P. Saefong and Williams Watts

SAN FRANCISCO
EnergiesNet.com 02 25 2022

Oil futures settled lower on Friday, paring a gain for the week, as investors continued to monitor Russia’s invasion of Ukraine, a day after crude briefly topped the $100-a-barrel threshold for the first time in over seven years.

News reports said Russia was in favor of talks with Ukraine pressured prices, though few details were available and traders remained cautious.

Price action

• West Texas Intermediate crude for April delivery CL.1, -0.94% CL00, -0.94% CLJ22, -0.94% fell $1.22, or 1.3%, to settle at $91.59 a barrel on the New York Mercantile Exchange. The U.S. benchmark on Thursday hit an intraday high of $100.54. It settled 1.5% higher for the week, according to Dow Jones Market Data.
  
  
• April Brent crude BRNJ22, +0.65%, the global benchmark, declined $1.15, or 1.2%, at $97.93 a barrel on ICE Futures Europe. The contract, which traded as high as $105.79 on Thursday, added 4.7% for the week. The more actively traded May contract BRN00, +0.47% BRNK22, +0.47% fell $1.30, or 1.4%, to $94.12 a barrel.
  
  
• March gasoline RBH22, -1.42% fell 1.6% to $2.727 a gallon
  
  
• March heating oil HOH22, -1.08% lost 1.6% to about $2.85 a gallon. The contracts, which expire at the end of Monday’s session, scored weekly gains of over 2%.
  
  
• April natural gas NGJ22, -3.38% settled at $4.47 per million British thermal units, down 3.7% Friday, but up 2.1% for the week.
  

Market drivers

Crude fell after news reports, citing a summary of a call between Russian President Vladimir Putin and Chinese leader Xi Jinping provided by China’s Foreign Ministry, said Russia was ready to conduct negotiations with Ukraine.

On Thursday, oil ended with gains but well off session highs above $100 a barrel, as analysts tied the pullback to relief that a new round of sanctions announced by the U.S. and its allies against Moscow didn’t target Russia’s energy exports or cut the country off from the SWIFT payment system.

Read These countries are most vulnerable to energy shocks from Russia’s invasion of Ukraine: BCA

“This means that energy imports from Russia can still be paid for. The question now is how Russia will respond to the sanctions that have been decided, which will hit the banking sector and the technology industry hardest of all,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.

Read: Why Russia’s invasion of Ukraine could lift oil prices to a 14-year high

If Russia reacts by cutting back energy shipments, prices are likely to rise sharply again, he said, which also puts a focus on talks aimed at restoring Iran to the international nuclear accord, he said. “If U.S. sanctions on Iran were to be lifted, Iran would be able very quickly to place an additional 1.5 million to 2 million barrels of crude oil per day on the market,” he said.

Read: Potential for an Iran nuclear deal keeps oil rally in check

Meanwhile, the Organization of the Petroleum Exporting Countries and their allies will meet Wednesday to decide on production levels for April.

marketwatch.com 02 25 2022