Oil Up For The Week As Russian Sanctions Cause Supply Concerns

Meanwhile, analysts brace for the aftermath of Trump's inauguration: File Image/Pixabay

The worry over oil supply disruptions stemming from the latest sanctions against Russia from the U.S., which resulted in a week of gains for crude prices, was as strong as ever on Friday and propelled the commodity towards a fourth straight week of gains.

Brent settled down 50 cents at $80.79 per barrel, while West Texas Intermediate settled down 80 cents at $77.88 per barrel; the former benchmark was on course for a 1.3 percent weekly rise, while the latter added 1.7 percent for the week.

Phil Flynn, senior market analyst at Price Futures Group Inc., said, "Sanctions on Russia are causing tightness of supply in Europe, India and China as they scramble for supply."

Indeed, Bob McNally, president of Rapidan Energy Group, told media that "India will be more affected than China by sanctions, since India imports much greater amount of its oil from Russia than China" – the implication being that the country's days of buying cheap Russian oil could be over.

Stephen Innes, managing partner at SPI Asset Management, added, "These sanctions are proving effective, with Russia's shadow fleet facing significant challenges in unloading cargo."

More concern about disruptions stemmed from Washington taking tougher action against Iran's shadow fleet, which the International Energy Agency has estimated could affect 500,000 barrels per day (bpd) of supply.

Analysts on Friday were also looking ahead to possible ramifications following next Monday's inauguration of U.S. president Donald Trump; Innes said, "His track record suggests he might pressure Saudi Arabia to increase oil output" on the basis that Trump won't be happy with WTI lingering in the upper $70s.

Meanwhile, although it didn't sway Friday's trading, analytical optimism was generated by China, which achieved Beijing's growth goal last year after a late stimulus and export boom.