Islamabad, Feb 21: Oil prices continued their upward trend on Friday, poised for a weekly gain, as declining gasoline and distillate inventories in the U.S. fueled expectations of strong demand. Additionally, worries over supply disruptions in Russia provided further support to the market.
Brent crude rose by 16 cents (0.2%) to reach $76.64 per barrel by 01:23 GMT, while U.S. West Texas Intermediate (WTI) edged up 17 cents (0.2%) to $72.65. Both crude benchmarks were on track for a 3% weekly increase.
The Energy Information Administration (EIA) reported that while U.S. crude oil stockpiles grew last week, gasoline and distillate inventories declined due to seasonal refinery maintenance, which reduced processing capacity.
“The drawdown in U.S. gasoline and distillate stocks, coupled with concerns about constrained supply in Russia, is keeping oil prices strong,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
Meanwhile, geopolitical tensions continue to influence the market. Hopes for a peace agreement between Russia and Ukraine, which could have eased sanctions on Moscow, have diminished as Ukraine maintains a firm stance against negotiations that exclude its direct involvement. 
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President Volodymyr Zelensky expressed frustration over U.S. and Russian discussions about a potential settlement without Kyiv’s participation. However, after meeting with a U.S. envoy on Thursday, Zelensky indicated a willingness to negotiate a robust investment and security agreement with the U.S.
U.S. Treasury Secretary Scott Bessent suggested in an interview with Bloomberg Television that Russia might see some sanctions relief if it demonstrates a genuine commitment to ending the war in Ukraine.
Supply disruptions have also played a key role in keeping oil prices elevated. The Caspian Pipeline Consortium (CPC), a critical export route for Kazakh crude via Russia, experienced a 30%-40% reduction in oil flow on Tuesday following a Ukrainian drone strike on a pumping station. Despite this, Kazakhstan has reported record-high oil production levels. Industry insiders remain uncertain about how Kazakhstan managed to increase output despite constraints on its primary export pipeline.
With tightening U.S. fuel inventories and ongoing geopolitical uncertainty, oil prices are expected to remain volatile in the near term.
