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Oil heads for weekly gains as Ukraine war magnifies

Oil costs held constant on Friday, on track for a weekly rise of 5%, as the Ukraine war magnified and Chinese imports were set to increase in November.

Brent crude futures climbed 33 cents, or 0.44%, to $ 74.56 a barrel by 1008 GMT. U.S. West Texas Intermediate crude futures rose 27 cents, or 0.39%, to $70.37 per barrel.

Both agreements are set for gains of 5% this week, the greatest weekly rise since late September, as Moscow steps up its Ukraine offensive after Britain and the United States allowed Kyiv to strike Russia with their weapons.

Putin stated on Thursday Russia had fired a ballistic rocket at Ukraine and warned of a global dispute, raising the danger of oil supply interruption by one of the world's largest producers.

Ukraine has used drones to target Russian oil infrastructure, for example in June, when it utilized long-range attack drones to strike 4 Russian refineries.

What the market fears is unexpected destruction in any part of oil, gas and refining that not just triggers long-term damage but accelerates a war spiral, said PVM analyst John Evans.

The world's top crude importer, China, revealed policy steps on Thursday to enhance trade, consisting of support for energy item imports, amidst concerns over U.S. President-elect Donald Trump's hazards to enforce tariffs.

China's petroleum imports are set to rebound in November after sharp rate cuts enhanced need for Iraqi and Saudi oil, offsetting a drop in Iranian supply, according to experts, traders and ship tracking information.

Oil prices briefly dipped after information showed euro zone service activity took a surprisingly dogleg for the worse this month as the bloc's dominant services market contracted and manufacturing sank deeper into economic downturn.

Goldman Sachs said in a note that it expects Brent to remain in a $70 to $85 variety, but included that prices could arrive end of that if Iranian output is affected by Trump's possible tightening of sanctions.

(source: Reuters)