Oil posted the biggest weekly loss since April as low liquidity fueled big price swings and as restarts for key pipelines alleviated supply concerns.

West Texas Intermediate briefly fell below US$71 a barrel to the lowest price in a year. The U.S. benchmark — along with Brent crude — has given up all of its gains for the year and slumped 11 per cent this week. Thin trading has exacerbated price fluctuations, with volatility rising again Friday on stronger-than-expected US inflation data.

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TC Energy Corp. is planning to restart one leg of the shuttered Keystone oil pipeline beginning Saturday, following a 14,000-barrel crude spill, according to people familiar with the matter. Shell Plc has restored normal operations to a 20-inch segment of the Zydeco crude system after running it at reduced rates since November. Earlier in the week, there were some concerns the Keystone disruptions would put a dent into crude stockpiles in Cushing, Oklahoma, the nation’s largest storage hub.

“Crude can’t find a bid as Keystone looks to come back online in short order,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management. “For now, every headline is being seen through a bearish lens and buyers are not motivated get involved until they see demand signals improving.”

Friday’s WTI decline comes on the back of a small rally earlier in the day triggered by Russia President Vladimir Putin saying the country may cut production in response to the G7 cap on the price of its crude.

“Commentary from Russia about cutting production is perceived as tactic to talk up price as opposed to having a meaningful impact on supply,” Babin said.

Crude is now on track for its first back-to-back quarterly decline since mid-2019 on a souring economic outlook as central banks tighten monetary policy, though Treasury Secretary Janet Yellen still sees the U.S. avoiding a recession. Traders are also assessing the fallout from a price cap on Russian oil, which has led to a jam of tankers in Turkish waters due to a standoff over insurance.


  • WTI for January delivery fell 0.6 per cent to close at US$71.02 a barrel in New York.
  • Brent for February settlement slid 5 cents to US$76.10 a barrel, after falling as much as 1.4 per cent

The market continues to signal ample near-term supply, with the prompt spread — the difference between the two nearest contracts — for both WTI and Brent holding in contango. The global benchmark was about 47 cents a barrel in contango, compared with US$1.44 in backwardation a month earlier.