Brent gains amid escalating Russia-Ukraine tensions
The front-month ICE Brent contract has inched $0.06/bbl higher on the day from Friday, to trade at $74.79/bbl at 09.00 GMT.
PHOTO: Oil barrels along with a world map. Getty Images
Upward pressure:
Growing tensions between Russia and Ukraine have added upward pressure on Brent futures.
The Russian army targeted energy infrastructure in Ukraine's southern region of Mykolaiv and industrial facilities in the southeastern region of Zaporizhzhia on Sunday, Mykolaiv region’s governor Vitaliy Kim said on the Telegram messaging app.
“The Russia-Ukraine war has intensified following months of little movement from both sides,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Besides, the recent use of US-built long-range missiles by Ukraine to attack Russia escalated tensions between the two countries, indicating the onset of a new and deadly phase of the conflict, oil market analysts said.
“The recent exchanges indicate the war has entered a new and dangerous phase, raising concerns of disruptions to [oil] supplies,” Hynes added.
Downward pressure:
Oil prices felt some downward pressure due to easing of oil supply concerns in the Middle East.
Israel is nearing a ceasefire deal with the Iran-aligned Hezbollah militants in Lebanon. Both countries are progressing towards a ceasefire agreement rapidly to end the Israel-Hezbollah conflict, Axios reported citing two senior Israeli officials.
“[Brent] crude trades lower after Israel said it is nearing a ceasefire agreement with Hezbollah,” analysts from Saxo Bank said.
The surprise build in US crude inventories also weighed on Brent futures, adding to bearish market sentiment.
According to the US Energy Information Administration (EIA), commercial crude stocks rose by 545,000 bbls in the week ending 15 November, reaching 430 million barrels. Analysts expect the EIA to report another increase in US crude stocks in its upcoming weekly data.
By Aparupa Mazumder
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