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 on 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.”
The EU will not impose sanctions on Russian gas or oil, Hungarian Prime Minister Viktor Orban said in a video posted on his Facebook page on Friday, amid a summit of the bloc’s leaders in France.
“The most important issue for us has been settled in a favorable way: there won’t be sanctions that would apply to gas or oil, so Hungary’s energy supply is secure in the upcoming period,” Orban added.
The EU’s decision is at odds with the US, with President Joe Biden on Tuesday imposing an immediate ban on Russian oil and energy imports.
However, Europe is more reliant on energy supplied by Russia.
About 45 percent of the gas imported by Italy comes from Russia, while for Germany, 55 percent of gas purchases are supplied by Moscow.
But if gas represents 42 percent of Italy's energy consumption, it only represents a quarter for Germany.
Simone Tagliapietra, professor of energy at the Catholic University of Milan, told AFP that due to soaring prices the EU would pay, beginning in April, 1 billion euros ($1.1 billion) per day to Moscow for its energy needs.
Russian natural gas company Gazprom said on Friday it was continuing gas shipments via Ukraine at an unchanged volume of 109.5 million cubic metres a day, according to Reuters.