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.
