Crude oil prices: From a five-month low to now, poised for posting the best weekly gain since mid-June, have seen a sharp turnaround. Brent and WTI crude prices stabilised on Friday, October 24, after a .
For the week, both benchmarks are higher by about 7%, set to record their biggest weekly jump in four months.
Brent crude futures rose 46 cents, or 0.7%, to $66.45 by 1125 GMT. U.S. West Texas Intermediate crude futures also advanced 46 cents, or 0.7%, to $62.25.
What drove the sharp rise in crude oil prices?
Multiple factors drove the crude price rise, but main was the main trigger was the US sanctions on Russia’s two biggest oil companies — Rosneft and Lukoil.
U.S. President Donald Trump on Thursday imposed sanctions on Russian oil companies in a bid to pressure President Vladimir Putin to end the war in Ukraine. Together, the two energy giants account for over 5% of global oil output.
In response, Reuters reported that Chinese state-owned oil companies have suspended Russian crude purchases in the short term. Meanwhile, Indian refiners — the largest buyers of seaborne Russian oil — are expected to significantly reduce imports of Russian crude, according to the report.
“The recent U.S. sanctions on top Russian oil producers have rattled the market, and with China and India hesitating on Russian crude purchases, global supply is feeling tighter. OPEC+ has hinted they are ready to adjust output, but that’s still a watch-and-wait story,” said Trivesh D, COO Tradejini.
Additionally, hopes of a US-China trade deal and news that the US is seeking oil for delivery to its strategic reserves also buoyed crude oil prices.
Can crude prices hold gains?
Commenting on the outlook for the stock, Trivesh D, believes that the crude oil price rally could sustain in the near term, especially if these supply-side constraints continue and markets remain nervous about secondary sanctions.
“Brent crude has a strong support zone near $62.30, and a sustained move above $66 could open the way for an upside towards the $69.70 resistance level,” the analyst opined.
That said, the analyst advised investors should keep an eye on OPEC+ decisions and alternative supply sources and any quick ramp-up there could temper gains. For now, it’s a classic geopolitical supply play driving the market, he added.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.