MELBOURNE. Oil prices extended their rally on Friday at the end of a third volatile week of trade as there was slim progress in peace talks between Russia and Ukraine, raising the spectre of tighter sanctions and a prolonged disruption to oil supply.

A speech by Russian President Vladimir Putin on Thursday warning “traitors and scum” at home who helped the West that they would be spat out like gnats added to market jitters about an extended conflict.

Brent crude futures jumped $2.43, or 2.3%, to $109.07 a barrel at 0141 GMT, after surging nearly 9% on Thursday in the largest percentage gain since mid-2020.

US West Texas Intermediate (WTI) crude futures climbed $2.75, or 2.7%, to $105.73 a barrel, adding to an 8% jump on Thursday.

Despite the rebound, both benchmark contracts were set to end the week down about 4%, after having traded in a $16 range. Prices have dropped from 14-year highs hit nearly two weeks ago.

“I’m still expecting more volatility. There’s a lot of uncertainty out there still,” said Justin Smirk, senior economist at Westpac in Sydney.

The supply crunch from sanctions on Russia, stuttering nuclear talks with Iran, dwindling oil stockpiles and worries about a surge of Covid-19 cases in China hitting demand all drove the rollercoaster ride over the week.

Analysts said Putin’s speech, comments from a Kremlin spokesperson saying a report of major progress in peace talks was “wrong” and US President Joe Biden calling Putin a “war criminal” all stoked a wave of buying on Thursday.

The volatility has scared players out of the oil market, which in turn is likely to exacerbate price swings, traders, bankers and analysts said.

“In such a tight market and such an illiquid paper market - you’re going to get some volatility,” Smirk said.