Oil set for biggest weekly gain in 3 months as Russia cuts fuel exports

Reuters file photo for representation

Oil prices edged up on Friday, on track to rise at their steepest rate since early June as Ukraine's attacks on Russia's energy infrastructure push Moscow to restrict fuel exports and close to cutting crude output.

Brent futures climbed 15 cents, or 0.2%, to $69.57 a barrel by 0100 GMT, while US West Texas Intermediate (WTI) crude futures gained 23 cents, or 0.4%, to $65.21 a barrel.

Both benchmarks have jumped over 4% this week, their biggest increase since the week ended June 13.

"Gains were supported by ongoing Ukrainian drone strikes targeting Russian oil infrastructure, NATO's warning to Russia it is ready to respond to future violations of its airspace and Russia's move to halt key fuel exports," IG analyst Tony Sycamore said.

Russian Deputy Prime Minister Alexander Novak said on Thursday the country would introduce a partial ban on diesel exports until the end of the year and extend an existing ban on gasoline exports.

The fall in capacity to refine oil has pushed Moscow close to reducing crude output. Several Russian regions are facing shortages of certain grades of fuel.

Both benchmarks reached their highest levels since August 1 this week, driven by a surprise drop in US weekly crude inventories in addition to Ukraine's attacks on Russia's energy infrastructure.

Capping some gains, US gross domestic product increased at an upwardly revised 3.8% annualized rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its latest estimate on Thursday.

Stronger-than-expected economic data could make the Federal Reserve more cautious about cutting interest rates. The US central bank cut rates by 25 bps last week, its first cut since December, and had signaled more reductions ahead.

The Kurdistan Regional Government's announcement on Thursday that oil exports would resume within 48 hours also pressured prices.