Markets

Early-week hopes for progress in talks between Ukraine and Russia were dashed by the end of the week, sparking expectations that more sanctions may be levied against Russia, further disrupting global energy flows.

The main price drivers during the week ending March 11 were the ongoing conflict in Ukraine, on-and-off talks over bringing Iran's oil back to the international market, the early stages of talks to ease sanctions on Venezuela's oil industry, and hopes (though possibly in vain) for more crude production from OPEC+ members.

With new rounds of sanctions being imposed and traders largely avoiding purchases of Russian crude and refined products, futures prices for NYMEX and ICE crudes and petroleum products gained more than 20% while DME Oman crude was up by 17% over the week ending March 4.

Described by many reporters as the biggest attack on a European country since World War II, the invasion prompted new rounds of sanctions on various political and business figures and entities in Russia, including major banks. Fresh sanctions were imposed not only by western countries, but also by Japan and Australia.

After eight week-on-week increases, futures prices for NYMEX, and ICE crudes and products eased back over the week ending Feb. 18, though DME Oman crude made a modest weekly gain after having retreated in the previous week.

While there were some day-on-day declines due to the expectation that Iran may resume crude exports as negotiations over lifting sanctions were making some progress, NYMEX WTI and ICE Brent soared on Friday due to the tensions at the Russian-Ukrainian border.

In addition to sharp weekly price increases over the week ending Feb. 4, NYMEX WTI, ICE Brent, and DME Oman crude futures posted their largest month-on-month jumps since Feb. of last year.

NYMEX WTI and RBOB, ICE Brent and gasoil, and DME Oman crude futures posted their sixth week-on-week price increases over the week ending Jan. 18 while NYMEX ULSD saw its fifth weekly gain in a row.

Even though most petroleum futures prices pulled back on Thursday and Friday, the gains that had been made on previous days were enough to result in week-on-week rises.

Market chatter throughout the week seemed firmly focused on tightening fundamentals.