• 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%.

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