Crude oil prices retreated on Friday after wild swings during the entire week, on prospect of extra supply from Iran and added fears of a possible Russian invasion of Ukraine, disrupting supply.
U.S. West Texas Intermediate (WTI) crude fell 0.64% to $91.17 per barrel while Brent crude futures fell 0.54% to $92.45 per barrel.
Diplomats said the draft accord outlines a sequence of steps that would eventually lead to granting waivers on oil sanctions. That would bring about 1 million barrels a day of oil back to the market, but the timing is unclear.
“Nevertheless, the spectre of a potential 1 million b/d hitting the oil market saw Brent crude oil prices come under pressure,” ANZ Research analysts said in a note.
“Oil markets are vulnerable to supply disruptions given global oil stockpiles are tracking near seven‑year lows and as OPEC+ spare capacity comes into question given disappointing OPEC+ supply growth,” Commonwealth Bank (CBA) analyst Vivek Dhar said in a note.
With oil demand also recovering as air travel and road traffic picks up, CBA sees Brent holding in the $90 to $100 a barrel range in the short term and topping $100 “quite easily” if tensions escalate between Russia and Ukraine.
U.S. President Joe Biden is set to host a call on Friday on the Ukraine crisis with the leaders of Canada, France, Germany, Italy, Poland, Romania, Britain, the European Union, and NATO, the office of Canada’s Prime Minister Justin Trudeau said.
