OIL prices gained on Friday (Mar 7) but retreated from session highs after US President Donald Trump threatened sanctions on Russia if it fails to reach a cease-fire with Ukraine.
Brent crude futures settled at US$70.36 a barrel, up 90 US cents, or 1.3 per cent. West Texas Intermediate (WTI) futures finished at US$67.04, up 68 US cents, or 1.02 per cent.
Trump said in a post on Truth Social that he was “strongly considering” sanctions on Russian banks and tariffs on Russian products because its armed forces continue attacks in Ukraine.
In early trade, Brent jumped as high as US$71.40, while WTI hit US$68.22 after Russia’s Deputy Prime Minister Alexander Novak told reporters that the Opec+ producer group will go ahead with its April increase but may then consider other steps, including reducing production.
“If you do not like the price of oil, wait a minute,” said Phil Flynn, senior analyst with the Price Futures Group.
Flynn said oil’s moves on Opec+ and possible Russia sanctions swept aside other news, including delays in Israel and Hamas seeking a permanent cease-fire in Gaza.
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“I think it’s been overwhelmed by Russia news,” Flynn said. “It’s all Russia, Russia, Russia.”
For the week, Brent was down 3.8 per cent, its biggest weekly decline since the week of Nov 11. WTI finished down 3.9 per cent, its biggest weekly drop since the week of Jan 21.
Late in Friday’s session, prices stabilised following comments by US Federal Reserve chairman Jerome Powell, said John Kilduff, partner with Again Capital.
Powell said the Federal Reserve Board was watching how new policies from the Trump administration, especially on trade, were affecting the economy.
Kilduff said rapid changes in implementing policy, plus developments that could increase geopolitical risk, were being felt by traders.
“We are coming to terms with a lot of issues,” Kilduff said. “There is a realisation you should not get too aggressive on either side of the issue.”
Brent prices fell to their lowest since December 2021 on Wednesday after US crude inventories rose and Opec+ announced its decision to increase output quotas.
Opec+ had said it intended to proceed with a planned April output increase, adding 138,000 barrels per day to the market.
In other supply news, comments from US Treasury Secretary Scott Bessent indicated that the US aims to reduce Iranian crude exports to a trickle.
Trump’s administration is considering a plan to inspect Iranian oil tankers at sea, Reuters reported on Thursday, citing sources familiar with the matter, continuing efforts to drive down Iranian oil exports to zero.
Global markets have been whipsawed by fluctuating trade policy in the US, the world’s biggest oil consumer.
On Thursday Trump suspended the 25 per cent tariffs he had imposed on most goods from Canada and Mexico until Apr 2, though steel and aluminium tariffs would still take effect on Mar 12.
In the US, job growth picked up in February and the unemployment rate edged up to 4.1 per cent, but growing uncertainty over trade policy and deep federal government spending cuts could erode the labour market’s resilience in the months ahead. REUTERS
