Oil Posts Largest Weekly Loss Since April
Oil posted the biggest weekly loss since April as low liquidity fueled big price swings and as
restarts for key pipelines alleviated supply concerns.
West Texas Intermediate briefly fell below $71 a barrel to the lowest price in a year. The US
benchmark — along with Brent crude — has given up all of its gains for the year and
slumped 11% this week. Thin trading has exacerbated price fluctuations, with volatility rising
again Friday on stronger-than-expected US inflation data.
TC Energy Corp. is planning to restart one leg of the shuttered Keystone oil pipeline
beginning Saturday, following a 14,000-barrel crude spill, according to people familiar with
the matter. Shell Plc has restored normal operations to a 20-inch segment of the Zydeco crude
system after running it at reduced rates since November. Earlier in the week, there were some
concerns the Keystone disruptions would put a dent into crude stockpiles in Cushing,
Oklahoma, the nation’s largest storage hub.
“Crude can’t find a bid as Keystone looks to come back online in short order,” said Rebecca
Babin, a senior energy trader at CIBC Private Wealth Management. “For now, every headline
is being seen through a bearish lens and buyers are not motivated get involved until they see
demand signals improving.”
Friday’s WTI decline comes on the back of a small rally earlier in the day triggered by Russia
President Vladimir Putin saying the country may cut production in response to the G-7 cap on
the price of its crude.
“Commentary from Russia about cutting production is perceived as tactic to talk up price as
opposed to having a meaningful impact on supply,” Babin said.
Crude is now on track for its first back-to-back quarterly decline since mid-2019 on a souring
economic outlook as central banks tighten monetary policy, though Treasury Secretary Janet
Yellen still sees the US avoiding a recession. Traders are also assessing the fallout from a
price cap on Russian oil, which has led to a jam of tankers in Turkish waters due to a standoff
• WTI for January delivery fell 0.6% to close at $71.02 a barrel in New York.
• Brent for February settlement slid 5 cents to $76.10 a barrel, after falling as much as
The market continues to signal ample near-term supply, with the prompt spread — the
difference between the two nearest contracts — for both WTI and Brent holding in contango.
The global benchmark was about 47 cents a barrel in contango, compared with $1.44 in
backwardation a month earlier.