By Peter Nurse
Investing.com — Oil prices edged higher Friday, but are still set to end a volatile week sharply lower amid tentative signs of diplomatic progress towards ending the Ukraine conflict.
By 9:10 AM ET (1410 GMT), futures traded 0.7% higher at $106.75 a barrel, while the contract rose 0.7% to $110.10.
were up 2.5% at $3.2347 a gallon.
Early gains were pared Friday following a Reuters report quoting Russian President Vladimir Putin said there were “certain positive shifts” in talks with Ukraine, raising hopes of some form of conclusion to his country’s invasion of Ukraine, which has now entered its third week.
In a meeting with his Belarusian counterpart Alexander Lukashenko, Putin added talks continued “practically on a daily basis”.
Oil prices traded higher earlier Friday as the talks around lifting sanctions on Iran were paused followed by concerns in Western capitals, especially Washington, that the concessions offered on its nuclear program are too high a price to pay for an increase in supplies of Iranian oil to world markets.
The crude market remains at elevated levels in the wake of the Russian invasion of Ukraine, and the associated Western sanctions, but still looked set for the largest weekly drop since November following talk this week of additional supplies for OPEC countries.
The U.S. crude futures contract is heading for a weekly drop of around 8% after touching a high of $130.50, while the Brent contract is set for a weekly fall of about 7% after hitting a 14-year high of $139.13.
Also of interest later in the session will be the rig count, which measures U.S. drilling ability, with the country’s shale companies seemingly unable to increase production significantly, despite record-high prices.
The number of oil rigs fell by three to 519 last week, their first weekly decline since January, even with crude prices soaring to their highest since 2008.
The need for additional production was illustrated by data released Wednesday by the , which showed U.S. crude oil stockpiles falling by 1.9 million barrels last week, while U.S. crude stocks in the Strategic Petroleum Reserve fell to 577.5 million barrels, the lowest since July 2002.
This puts the Biden administration in a difficult position of pleading with oil companies to boost crude production, despite coming into office with a long-term goal of shifting the U.S. away from fossil fuels that worsen climate change.
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