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Oil Bounces as Ukraine Ceasefire Deal Remains Elusive 

An oil tank and an oil pumpjack are pictured in the Permian basin, Loco Hills regions, New Mexico, US, April 6, 2023. (Reuters)
An oil tank and an oil pumpjack are pictured in the Permian basin, Loco Hills regions, New Mexico, US, April 6, 2023. (Reuters)
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Oil Bounces as Ukraine Ceasefire Deal Remains Elusive 

An oil tank and an oil pumpjack are pictured in the Permian basin, Loco Hills regions, New Mexico, US, April 6, 2023. (Reuters)
An oil tank and an oil pumpjack are pictured in the Permian basin, Loco Hills regions, New Mexico, US, April 6, 2023. (Reuters)

Oil prices rebounded on Friday to recover some of their more than 1% losses in the previous session, partly due to diminishing prospects of a quick end to the Ukraine war that could bring back more Russian energy supplies.

Brent crude futures rose 46 cents, or 0.7%, to $70.34 a barrel by 0406 GMT after settling 1.5% lower in the previous session. US West Texas Intermediate crude was at $67.03 a barrel, up 48 cents, or 0.7%, after closing down 1.7% on Thursday.

Russian President Vladimir Putin said on Thursday that Moscow supported a US proposal for a ceasefire in Ukraine in principle, but sought a number of clarifications and conditions that appeared to rule out a quick end to the fighting.

"Russia's tepid support of a 30-day ceasefire proposal with Ukraine has reduced confidence around a ceasefire in the short term," IG market analyst Tony Sycamore said.

"The feeling is that US won't lift sanctions until they agree a ceasefire."

However, the global trade war that has roiled financial markets and raised recession fears is escalating with US President Donald Trump on Thursday threatening to slap a 200% tariff on alcohol imports from Europe.

The International Energy Agency warned on Thursday that global oil supply could exceed demand by around 600,000 barrels per day this year, due to growth led by the United States and weaker than expected global demand.

"The macroeconomic conditions that underpin our oil demand projections deteriorated over the past month as trade tensions escalated between the US and several other countries," the IEA said, prompting it to revise down its demand growth estimates for the fourth quarter of 2024 and the first quarter of 2025.

The Trump-driven trade war woes and demand worries dented oil prices on the previous day, though the possibility of less Russian oil in the global markets in the near term provided some cushion during Friday's trade.

"Most price projections were to the downside in the short term, but geopolitical tension could still cause supply disruptions," ANZ analysts said in a note to clients.

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British Steel Industry Calls for Help with Electricity Prices

Onshore wind turbines at Little Cheyne Court Wind Farm operate beside electricity pylons in Dungeness, Britain, July 10, 2024. REUTERS/Chris J. Ratcliffe/File photo
Onshore wind turbines at Little Cheyne Court Wind Farm operate beside electricity pylons in Dungeness, Britain, July 10, 2024. REUTERS/Chris J. Ratcliffe/File photo
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British Steel Industry Calls for Help with Electricity Prices

Onshore wind turbines at Little Cheyne Court Wind Farm operate beside electricity pylons in Dungeness, Britain, July 10, 2024. REUTERS/Chris J. Ratcliffe/File photo
Onshore wind turbines at Little Cheyne Court Wind Farm operate beside electricity pylons in Dungeness, Britain, July 10, 2024. REUTERS/Chris J. Ratcliffe/File photo

Britain's steel industry has called on the government to help with electricity prices that it says can be it 50% higher than those paid by European competitors.

Earlier this week, the sector was hit by a 25% tariff on exports to the US that make up around 9% of the value of Britain's steel exports.

"Uncompetitive electricity prices must be addressed to ensure the steel industry can thrive, secure thousands of jobs, and safeguard national steel production as geopolitical turbulence increases," said Frank Aaskov, Director, Energy and Climate Change Policy at industry group UK Steel.

The group, which represents the country's main steel producers, has called on the government to set fixed electricity prices for the sector via a contract-for-difference, Reuters reported.

Under the system, if wholesale electricity prices rise above a threshold called the strike price, the government would subsidise the difference, and if it fell below a certain level, the steel makers would pay back the difference.

"The strike price could be set at regular intervals to reflect changes in wholesale electricity prices and provide the steel sector with much-needed protection from price volatility,” a report by consultancy Baringa, commissioned by the steel industry said.

The Baringa report said UK producers pay around 68 pounds per megawatt hour (MWh) for electricity, compared with 52 pounds/MWh in Germany and 44 pounds MWh in France.

Last month, the government launched a consultation on a strategy for the steel sector, said it sought to invest 2.5 billion pounds ($3.23 billion) and look at issues including high energy costs.

A government spokesperson said the government was "already bringing energy costs for steel closer in line with other major economies" through a package of measures to support industry.

"This fully exempts eligible firms from certain costs linked to renewable energy policies, particularly those exposed to the high cost of electricity, such as steel."

Steel UK members include British Steel, Liberty Steel and Tata Steel.