Crude oil scores fourth straight weekly gain as worries mount over Ukraine

Crude oil futures rallied today to cap a fourth straight weekly gain, with rising tensions between Russia and Ukraine heightening the potential for a disruption to global crude supplies, while traders grow more optimistic over energy demand prospects.
February WTI crude (CL1:COM) closed +2.1% to settle at $83.82/bbl, surging 6.2% for the week and within 1% of a multiyear high, as Russia began moving tanks and other military equipment toward Ukraine with negotiations over the crisis apparently stalling.
“The possibility of an armed conflict is a serious development and has wide geopolitical ramifications, thereby boosting oil price premiums,” Manish Raj, chief financial officer at Velandera Energy Partners, tells MarketWatch.
Also, traders did not want to be short in the market amid the mounting tensions and ahead of a U.S. three-day weekend, says Price Futures Group’s Phil Flynn.
On demand prospects, “the picture for oil is getting better because people are looking past the omicron variant and looking to reopening and a rebound in activity,” says U.S. Bank Wealth Management strategist Rob Haworth.
Demand optimism is reflected in the market’s backwardated pricing structure, with the spread between WTI’s two nearest December contracts now well above $6/bbl, up from less than $3/bbl early last month, according to Bloomberg.
Energy (NYSEARCA:XLE) again was the week’s top S&P sector performer, +5.2%.