Oil heads for weekly loss as prices stay above $100 a barrel

Prices were also supported by reports that the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, undershot their production targets by an even greater margin in January.

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New York: Oil prices were headed for a second weekly loss but remained above $100 a barrel in a week that saw values swing $16 amid turbulence from the war in Ukraine.

Brent crude was little changed at $106.78 a barrel at 5:04 p.m. Riyadh time after surging almost 9 percent on Thursday, the biggest one-day percentage advance since the mid-2020s. US benchmark WTI rose 0.5 percent to $103.53 after an 8 percent gain on Thursday.

Both contracts were set to close the week more than 5 percent lower after hitting 14-year highs less than two weeks ago.

Continued hostilities in Ukraine have seen traders trying to avoid Russian crude, triggering supply concerns, while shutdowns in China amid a surge in COVID-19 cases are threatening the demand picture.

The possibility of extra barrels from Iran as nuclear proliferation talks make fitful progress has added to volatility.

Russia said it was yet to reach a cease-fire agreement with Ukraine following four days of talks as it continued to pummel major cities across the country.

“President Putin appears unwilling to end hostilities. This should ensure that the energy complex remains well supported with plenty of scope for further volatility,” said PVM oil market analyst Stephen Brennock.

Prices were also supported by reports that the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, undershot their production targets by an even greater margin in January.

OPEC+ compliance with oil production cuts rose to 136 percent in February from 129 percent in January, two sources from the producer group told Reuters.

A high compliance rate indicates that the group is producing below its output targets as several members struggle to raise output as OPEC+ gradually unwinds its production cuts.

The International Energy Agency this week said OPEC+ was producing 1.1 million fewer barrels per day (BPD) than its March target.

Several major consuming nations, including the United States, have called on OPEC+ to raise its output at a faster rate, particularly as Western sanctions are expected to curtail Russia’s production.

Lower-than-planned production is hurting energy reserves. Consultancy FGE said on-land product stocks at key countries are 39.9 million barrels lower for this time of the year relative to the 2017-2019 average.

Europe’s willingness to curtail its dependence on Russian energy appeared to be firming on Friday as German Foreign Minister Annalena Baerbock indicated that her country should consider imposing an oil embargo on Russia in the wake of its invasion of Ukraine.

In a security policy speech Friday, she said it was important to take a stance and not remain silent due to economic or energy dependency.

“Even if it’s difficult, including on questions now with regard to oil or other embargoes,” said Baerbock.

Germany receives about a third of its oil from Russia and half of its coal and natural gas.

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