Price action

• West Texas Intermediate crude for April delivery
  CL.1,
  +3.01%

  CL00,
  +3.01%

  CLJ22,
  +3.01%
  rose $2.09, or 2%, to $108.11 a barrel on the New York Mercantile Exchange, headed for a weekly loss of more than 6%.

• May Brent crude
  BRN00,
  +2.35%

  BRNK22,
  +2.35%,
  the global benchmark, was up $2.09, or 1.9%, at $111.42 a barrel on ICE Futures Europe. Brent was down over 5% for the week. Both Brent and WTI closed Tuesday at their highest since 2008.

• April natural gas
  NGJ22,
  +2.83%
  traded at $4.724 per million British thermal units, up 2% for the session, but down 5.9% for the week.

• April gasoline
  RBJ22,
  +4.11%
  tacked on 3% to $3.25 a gallon, trading over 8% lower for thee week, while April heating oil
  HOJ22,
  +4.33%
  rose 2.4% to $3.376 a gallon, down nearly 11% for the week.

Market drivers

The oil market has seen volatile swings this week, surging as the U.S. moved to ban imports of Russian crude, and raising the specter of broader Western sanctions against Russian energy that would leave a massive hole in the global supply/demand balance.

However, “a unilateral ban on Russian imports means that Russian barrels that would have normally been purchased by the U.S. could still find another buyer on the global market, which would leave the global supply and demand balance largely unchanged and allow U.S. buyers to source the supply from elsewhere,” Troy Vincent, senior market analyst at DTN, told MarketWatch.

Only very small consumers of Russian exports have prohibited the imports of Russian oil but if a growing number of nations ban Russian oil, “global production outside of Russia simply cannot ramp up quickly enough to accommodate demand,” he said.

Remarks by Russian President Vladimir Putin on Wednesday pledging the country would continue to meet its export commitments helped put some pressure on crude, said Carsten Fritsch, commodity analyst at Commerzbank, soothing worries Moscow could move to shut off exports altogether in retaliation for far-reaching financial sanctions by Western countries.

Remarks earlier this week by the United Arab Emirates’ ambassador to the U.S. expressing a willingness to see the Organization of the Petroleum Exporting Countries boost output were also a factor, even though the U.A.E.’s energy minister subsequently contradicted the ambassador, Fritsch said. The remarks nonetheless have initiated a debate, the analyst said.

“Oil producers in the U.S. now appear to be reacting to the significantly higher prices after all and are stepping up their output, as the latest forecasts from the U.S. Energy Information Administration show. At the same time, the [International Energy Agency] has signaled its willingness to release further oil from emergency reserves if necessary,” he said.

The Iranian nuclear talks in Vienna paused without a deal on Friday, following Russian demands for guarantees from Washington that would prevent Western sanctions on Moscow stopping Russia doing business with Iran.

Iran, the U.S. and other world powers have been negotiating how to revive the 2015 nuclear deal, which lifted most international sanctions on Iran in exchange for tight but temporary restrictions on Tehran’s nuclear work. The Trump administration withdrew the U.S. from the accord in 2018, reimposing sanctions on Tehran, with Iran subsequently breaching the terms of the agreement.

A military spokesman for the Houthi movement said it had targeted a Saudi Aramco refinery in Riyadh using three drones, Reuters reported. Saudi state news agency SPA on Thursday reported that a drone had attacked a Riyadh refinery but didn’t disrupt petroleum supplies.