Crude oil rises with support from diesel on potential supply disruptions

[Data analyzing in commodities energy market: the charts and quotes on display. US WTI crude oil price analysis. Stunning price drop for the last 20 years.]
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Crude oil futures ended a week of choppy trading with modest gains Friday, but the benchmark indexes fell for the second straight week as persistent concerns over excess supply and weaker demand mostly outweighed risks of disruptions.

While OPEC+ started the week by agreeing to another modest production hike for December, some analysts said the group's decision to pause increases in Q1 2026 suggests the prospect of a sizeable surplus next year, while Saudi Arabia sharply reduced the price of the crude it sells to Asian customers for December, another sign of caution.

Adding to the bearish sentiment, the latest data from the Energy Information Administration showed U.S. crude stockpiles rose by 5.2 million barrels last week, against expectations of a small decline.

On Friday, Ukrainian strikes on Russian oil facilities contributed to higher diesel prices, which were seen supporting crude, as "renewed attacks on Russian oil refineries have spiked the European gasoil spread with spillover into the U.S. diesel curve," Ritterbusch analysts said in a note. "We anticipate further WTI consolidation if diesel continues to provide a major price prop."

Commodity trader Gunvor withdrew its offer to buy the international assets of sanctioned Russian oil producer Lukoil after the U.S. Treasury Department said it opposed the deal and called the Swiss commodities trader "the Kremlin's puppet," indicating a hard-line approach by the Trump administration in its effort to pressure Russia.

However, "the price action that we have seen following the sanction announcement suggests that the market is of the view that we will not see a significant amount of supply lost," ING analysts said in a note, noting that since 2022, Russia has effectively demonstrated its ability to circumvent sanctions and embargoes.

After regular Nymex trading closed, President Trump granted Hungary an exemption from sanctions on purchases of Russian oil.

For the week, front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for December delivery ended -2% to $59.75/bbl, and front-month Brent crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) for January delivery settled -1.7% to $63.63/bbl; on Friday, WTI rose 0.5% and Brent added 0.4%.

U.S. natural gas futures (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) gained for a third consecutive week, as the market prepares for the first cold snap of the season that is expected to raise demand in the coming days; the front-month Nymex contract for December delivery closed +4.6% this week to $4.315/MMBtu, despite falling 0.9% on Friday.

ETFs: (USO [https://seekingalpha.com/symbol/USO]), (BNO [https://seekingalpha.com/symbol/BNO]), (UCO [https://seekingalpha.com/symbol/UCO]), (SCO [https://seekingalpha.com/symbol/SCO]), (USL [https://seekingalpha.com/symbol/USL]), (DBO [https://seekingalpha.com/symbol/DBO]), (DRIP [https://seekingalpha.com/symbol/DRIP]), (GUSH [https://seekingalpha.com/symbol/GUSH]), (USOI [https://seekingalpha.com/symbol/USOI]), (UNG [https://seekingalpha.com/symbol/UNG]), (BOIL [https://seekingalpha.com/symbol/BOIL]), (KOLD [https://seekingalpha.com/symbol/KOLD]), (UNL [https://seekingalpha.com/symbol/UNL]), (FCG [https://seekingalpha.com/symbol/FCG]), (XLE [https://seekingalpha.com/symbol/XLE])

Energy stocks, as represented by the Energy Select Sector SPDR Fund (XLE [https://seekingalpha.com/symbol/XLE]), finished +1.6% this week.

MORE ON CRUDE OIL

* WTI Crude Holds Near $59 As Oversupply And Saudi Price Cuts Weigh On Outlook [https://seekingalpha.com/article/4840470-wti-crude-holds-near-59-as-oversupply-and-saudi-price-cuts-weigh-on-outlook]
* Russia Sanctions Could Make For An Interesting End Of Year For Markets [https://seekingalpha.com/article/4839282-russia-sanctions-could-make-for-an-interesting-end-of-year-for-markets]
* Commodities: Oil Weighed Down By U.S. Stock Build [https://seekingalpha.com/article/4839056-commodities-oil-weighed-down-us-stock-build]