Oil prices are on track for their largest weekly increase since early October, driven by escalating hostilities in the Russia-Ukraine conflict.

West Texas Intermediate (WTI) traded near US$70 per barrel, marking a gain of more than 4% for the week, while Brent crude settled above US$74. This rise comes as Ukraine reported the use of a "new" type of Russian ballistic missile, alongside Ukraine's deployment of Western-provided long-range weaponry.

The Kremlin's recent revision of its nuclear doctrine further highlights the intensifying conflict, following months of fierce attrition on both sides.

Despite the current price surge, oil markets face challenges ahead. Analysts predict a significant supply surplus in 2025, with attention focused on potential OPEC+ moves to reactivate idle production. Weak demand from China, which continues to struggle with prolonged economic difficulties, could also weigh on prices.

Oil markets have fluctuated between weekly gains and losses since mid-October, reflecting the impact of factors such as a robust US dollar and abundant supply levels.

Bloomberg