Oil prices extended gains for the week ending Feb. 21 with the prices of West Texas Intermediate (WTI) for April delivery up 2.03 percent and Brent crude oil for April delivery up 2.06 percent.
Although WTI and Brent crude tried to test 55 U.S. dollars level and 60 dollars level, respectively, the momentum was fragile due to cautious sentiment in the market.
After two weeks gains of prices, WTI and Brent crude still decreased by 12.58 percent and 11.36 percent, respectively, this year.
WTI closed the week at 53.38 dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 58.50 dollars a barrel on the London ICE Futures Exchange.
A smaller-than-expected increase in U.S. crude stockpiles during the week ending Feb. 14 provided a support to the oil prices.
Oil prices had rallied for two weeks, mainly driven by incentive measures announced by China with aim at boosting foreign trade and easing borrowing costs, which would revive demand for crude oil.
The prices had also been supported recently by threats to supply due to worsening situations in term of crude oil exports from both Venezuela and Libya.
U.S. government announced on Tuesday that it had imposed sanctions against a subsidiary of Russian oil producer Rosneft and its president due to their alleged support for Venezuela in sanctions evasion.
The United States has been pursuing a policy of economic sanctions and diplomatic isolation against the Maduro government in support of opposition leader Juan Guaido, while Russia deems U.S. sanctions on Venezuela illegitimate. The investors worried that the U.S. sanctions could impede crude oil flows from Venezuela.
On Monday, EU foreign ministers in Brussels agreed, after intense debate, to launch a new mission to enforce the weapons embargo against Libya. Moreover, in last weekend’s Munich Security Conference, the countries involved in the Libyan conflict once again agreed to honor the arms embargo.
Meanwhile, the U.S. Dollar Index remained strong after falling below the 2020 high and analysts expected a deeper retracement below the 99.20 support level. A higher index makes the U.S.-dollar-sensitive crude oil more expensive for foreign buyers.
For the upcoming weeks, the market sentiment would stay volatile as uncertainty over demand and supply lingers. Enditem