Oil prices rebounded on Friday after falling more than 1% in the previous session, partly as the prospect of an end to the Ukraine war that could bring more Russian energy supplies back to Western markets faded.

Brent crude futures were up 54 cents, or 0.77%, at $70.42 a barrel by 1055 GMT, after closing 1.5% lower in the previous session. U.S. West Texas Intermediate crude futures were at $67.13 a barrel, up 58 cents, or 0.87%, after closing down 1.7% on Thursday.

Prices are expected to end the week more or less flat from Friday, when Brent closed at $70.36 and WTI at $67.04. "Brent has been hovering around the $70 mark for the past two weeks. Whether it will remain at this level in the coming week depends on the political news situation," Commerzbank analysts said in a note.

Russian President Vladimir Putin said on Thursday that Moscow supported a U.S. proposal for a ceasefire in Ukraine in principle, but asked for a number of clarifications and conditions that appeared to rule out a quick end to the fighting.

"Russia's tepid support for a proposed 30-day ceasefire with Ukraine has reduced confidence in the ceasefire in the short term," said IG market analyst Tony Sycamore.

Increasing pressure on Putin to reach a peace deal over Ukraine, the Trump administration said on Thursday that licenses allowing energy transactions with Russian financial institutions had expired this week.

Chinese state companies have also curbed imports of Russian oil due to the risk of sanctions, sources told Reuters.

On Friday, China and Russia backed Iran after the United States demanded nuclear talks with Tehran, with senior Chinese and Russian diplomats saying dialogue should only resume on the basis of "mutual respect" and all sanctions should be lifted.

"Most price projections are skewed to the downside in the short term, but geopolitical tensions could still cause supply disruptions," ANZ analysts said in a note to clients.

The International Energy Agency warned on Thursday that global oil supply could exceed demand by around 600,000 barrels per day this year, due to U.S.-led growth and weaker-than-expected global demand.

Macroeconomic instability caused by escalating trade tensions between the U.S. and other countries prompted the IEA to cut its demand growth estimates for the final quarter of 2024 and the first quarter of this year.

"High demand-side risks and increased supply from OPEC+ argue against a sustained recovery in oil prices," Commerzbank analysts said. (Newsmaker23)

Source: Reuters