- Brent, WTI both headed for 7% weekly gain
- US sanctions on two Russian oil companies raise supply concerns
- Chinese state oil majors to suspend Russian oil purchases
- Indian refiners set to cut their Russian crude imports
LONDON, Oct 24 (Reuters) - Oil prices were little changed on Friday, stabilising after the previous day's surge and remaining on track for a weekly gain as fresh U.S. sanctions on Russia's two biggest oil companies over the war in Ukraine fuelled supply concerns.
Brent crude futures were up 12 cents, or 0.2%, at $66.11 by 0808 GMT. U.S. West Texas Intermediate crude futures added 16 cents, or 0.3%, to $61.95.
"Everyone is waiting for signs of how big the impact is of the new sanctions on Russia. The market is in a wait-and-see mode to see what happens to the flows," said Giovanni Staunovo, commodity analyst at UBS.
"In the past, similar sanctions have caused just temporary disruption."
Both benchmarks jumped more than 5% on Thursday and were set for about a 7% weekly gain, the biggest since mid-June.
Six-month spreads for Brent and U.S. crude futures returned to backwardation - when contracts for later loading fall below those for earlier loading - having briefly been in contango this week.
That indicates a shift among trader concerns from oversupply to undersupply, allowing them to sell at near-month higher prices instead of paying for storing oil for future sale.
US SANCTIONS TWO MAJOR RUSSIAN OIL SUPPLIERS
U.S. President Donald Trump hit Russia's Rosneft and Lukoil with sanctions on Thursday to pressure Russian President Vladimir Putin to end the Ukraine war. The two companies together account for more than 5% of global oil output.
The sanctions prompted Chinese state oil majors to suspend Russian oil purchases in the short term, trade sources told Reuters. Refiners in India, the largest buyer of seaborne Russian oil, are set to sharply cut Russian crude imports, industry sources said.
"Flows to India are at risk in particular," Janiv Shah, a vice president of oil markets analysis at Rystad Energy, said in a client note. "Challenges to Chinese refiners would be more muted, considering the diversification of crude sources and stock availability."
Kuwait's oil minister said the Organization of the Petroleum Exporting Countries would be ready to offset any shortage in the market by raising production.
The U.S. said it was prepared to take further action, while Putin derided the sanctions as an unfriendly act, saying they would not significantly affect the Russian economy and talking up Russia's importance to the global market.
Britain sanctioned Rosneft and Lukoil last week and the European Union approved a 19th package of sanctions against Russia that includes a ban on imports of Russian liquefied natural gas.
The EU also added two Chinese refiners with a combined capacity of 600,000 barrels per day, as well as Chinaoil Hong Kong, a trading arm of PetroChina, to its Russian sanctions list, its official journal showed on Thursday.
Russia was the world's second-biggest crude oil producer in 2024 after the U.S., U.S. energy data showed.
Investors are also focusing on a meeting between Trump and Chinese President Xi Jinping next week as the pair work to defuse long-standing trade tensions between the superpowers and end a spate of tit-for-tat retaliatory measures.
Reporting by Anna Hirtenstein in London. Additional reporting by Mohi Narayan in New Delhi and Yuka Obayashi in Tokyo; Editing by Christopher Cushing and Jan Harvey
Source: Reuters