Oil prices rose on Friday on the back of the declining value of the US dollar, which made dollar-indexed crude oil cheaper for buyers, as well as supply fears over rising tensions in the Russia-Ukraine conflict and Iran’s seizure of an oil tanker.
International benchmark Brent crude traded at $73.72 per barrel at 10.35 a.m. local time (0735 GMT), a 1.68% increase from the closing price of $72.50 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $69.70 per barrel, up 1.66% from the previous session’s close of $68.56 per barrel.
The main driver of the escalation in dollar-indexed oil prices on the last day of the week was the falling value of the greenback.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, declined 0.27% to 100.91 early Friday.
On the supply side, tensions heightened between Russia and Ukraine when the Kremlin said two Ukrainian drones targeted Russian President Vladimir Putin’s residence overnight on Wednesday, triggering investor fears.
While Ukraine denied any involvement in the Kremlin attack, Russia claimed on Thursday that the US was behind the alleged drone attack on the presidential residence by Ukraine late Tuesday.
‘We are well aware that decisions on such actions, on such terrorist attacks, are not made in Kyiv but, namely, in Washington. And Kyiv is already doing what it is told to do,’ Kremlin spokesman Dmitry Peskov said during a media briefing.
Supply woes further grew after Iran’s Islamic Revolutionary Guards Corps (IRGC) confirmed the seizure of a foreign oil tanker in the Strait of Hormuz.
Wednesday’s incident comes a week after the Iranian army’s naval division seized a Marshal Islands-flagged ‘transgressor’ tanker and directed it to the coastal waters of Iran in the Sea of Oman following an encounter with an Iranian vessel.
-US banking crisis deepens
Further price upticks were limited over lingering concerns that the banking sector crisis in the US may intensify, following reports that shares of PacWest contracted by 50.6% on Thursday as the bank was in bailout talks with potential partners and investors.
This comes after US regulators closed the troubled US-based First Republic Bank on Monday, with JPMorgan Chase set to acquire its assets.
Investors were also disappointed over worse-than-expected industrial data from China.
According to the National Bureau of Statistics on Sunday, China’s manufacturing activity unexpectedly contracted in April, raising doubts about the country’s post-COVID economic rebound.
