Oil on course for biggest decline since November as supply worries ease

Oil prices went in and out of positive territory Friday and were headed for their biggest weekly decline since November as traders looked toward ways in which disruptions of Russian oil supply could be remedied in a tight market.

Oil prices soared after Russia invaded Ukraine and hit their highest levels since 2008 but have pulled back a bit this week in hopes that some producing countries may act to increase supply.

Brent crude futures were up 10 cents, or 0.1 percent, at $109.43 a barrel by 1353 GMT. US West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.2 percent, to $106.25 a barrel.

Brent, which rose over 20 percent last week, was on track for a weekly fall of 7.6 percent after hitting $139.13 on Monday. US crude was headed for a weekly drop of 8.4 percent after touching a high of $130.50 on Monday. Both contracts last touched these price peaks in 2008.

Volatility was fueled this week as the Russia-Ukraine conflict pushed the United States and many Western oil firms to stop buying Russian oil amid talk of potential supply additions from Iran, Venezuela and the United Arab Emirates.

“We have a close eye on the pressure valves that will absorb the supply shock,” said UBS head of economics Norbert Ruecker.

“These include more strategic storage releases, more US shale oil, and more petro-nations’ oil including the element of the high diplomatic cost the West is willing to bear by possibly allowing Iran and even Venezuela back to the market, and ultimately the economic costs by high fuel prices curbing demand and temporarily denting growth.”