Street Calls of the Week
Investing.com-- Oil prices surged Friday on renewed concern over Russian crude supply, outweighing worries over oversupply and future U.S. demand.
At 09:05 ET (13:05 GMT), Brent oil futures for November surged 1.9% to $67.64 a barrel and West Texas Intermediate crude futures gained 1.8% to $63.47 a barrel.
Both contracts were up between 2% and 3% for this week.
US seeks harsher tariffs on Russian oil buyers
Oil has received support this week from a host of reports this week that showed the U.S. seeking harsher penalties for major buyers of Russian oil, specifically India and China.
The U.S. is seeking to pressure G7 countries to hit China and India with sharply higher tariffs for buying Russian oil, the Financial Times reported on Thursday.
Both countries already face about 50% U.S. tariffs, but have signaled little intent to wind down their oil buying from Moscow.
The U.S. is calling for 100% tariffs, and was earlier seen asking the European Union to ramp up its tariffs on China and India.
A disruptions to Chinese and Indian oil supplies could tighten global oil supplies, given that the two are among the world’s biggest crude importers.
The Kremlin said on Friday that there was a pause in peace negotiations between Russia and Ukraine.
Negotiators have held three rounds of direct talks this year in Istanbul, most recently on July 23, but the two sides remain far apart on how a possible peace deal might look, which could trigger further Western sanctions against Russia.
Additionally, a drone attack on Russia’s northwestern port of Primorsk - one of the country’s largest oil and fuel export terminals - led to a suspension of oil loading operations overnight, Reuters reported, citing an official from Ukraine’s SBU security service.
IEA report spurs oversupply concerns
Oil fell nearly 2% on Thursday after the IEA said in a monthly report that global oil production was likely to rise more than expected this year, amid output increases by key producer groups such as the Organization of Petroleum Exporting Countries and allies (OPEC+).
The IEA sees supply rising by 2.7 million barrels per day in 2025, up from prior forecasts of 2.5 million bpd, and by an additional 2.1 million bpd in 2026.
OPEC also released a monthly report this week, but made no change to its relatively higher forecasts for global oil demand growth in 2025 and 2026, stating that the global economy was growing steadily.
The cartel sees demand rising by 1.29 million bpd in 2025, almost twice the rate forecast by the IEA.
OPEC+ had on Sunday agreed to hike production by a substantially smaller margin than markets were fearing - a move that spurred some strength in oil.
But this was largely offset by growing concerns over slowing fuel demand, especially following weak data on American oil inventories.
Ambar Warrick contributed to this article
Oil took some support from heightened geopolitical tensions in Russia-Ukraine and the Middle East this week, while the prospect of more U.S. sanctions against Moscow also helped.
But this was largely offset by weak U.S. economic data sparking concerns over slowing demand, while a bearish report from the International Energy Agency also weighed.
Brent oil futures for November fell 0.5% to $66.03 a barrel, while West Texas Intermediate crude futures fell 0.6% to $61.74 a barrel by 21:35 ET (01:35 GMT). Both contracts were up between 0.5% and 1% for this week.