Oil prices rose as U.S. stocks continued their rally, extending a two-day rally, while investors assessed the prospects for a ceasefire in Ukraine and signs of a widening global surplus.

West Texas Intermediate crude oil prices traded above $60 per barrel, signaling that a risk premium remains in place as a peace deal remains elusive. Ukrainian negotiators headed for a new round of talks in Florida, with Russia objecting to several points in the U.S.-backed plan. The Kremlin said it was awaiting analysis of the U.S.-Ukraine discussions, Interfax reported on Friday.

The market is watching for progress on a settlement that could lower prices by potentially easing sanctions and increasing Russian oil flows. However, a deal appears far from over: Ukraine claimed responsibility for overnight attacks on Russia's Syzran oil refinery and Temryuk seaport.

Meanwhile, Washington is reportedly lobbying European countries in an effort to block Moscow's plan to use frozen assets to support a large loan for Ukraine. Adding to the bullish momentum, WTI on Friday surpassed its 50-day moving average, a key support level for the commodity.

Countering geopolitical risks, oversupply is exerting downward pressure on global prices. Saudi Aramco will lower the price of its flagship Arab Light crude to its lowest level since 2021 for January, while Canadian oil has fallen.

Meanwhile, traders are also focused on Russia-India talks after Putin arrived in New Delhi for his first state visit to India since the full-scale invasion of Ukraine. India, a major buyer of Russian crude, said its oil imports are based on commercial considerations and market dynamics.

WTI for January delivery rose 1.1% to $60.33 a barrel at 11:10 a.m. in New York. Brent for February delivery rose 1.1% to $63.74 a barrel. (alg)

Source: Bloomberg