Brent gains amid supply risk concerns
The front-month ICE Brent contract has gained by $0.80/bbl on the day from Friday, to trade at $67.25/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Brent’s price has moved higher over the weekend as Ukraine ramped up drone attacks on Russian oil facilities – adding fuel to supply disruption concerns in the global oil market, analysts said.
Kyiv has launched at least 361 drones into Russia overnight, targeting refineries and causing a fire at the Kirishi oil refinery in Russia's northwest, Reuters reported citing Russian officials.
“Oil prices extended last week’s gains this morning, following the latest attacks by Ukraine on refineries and ports in Russia,” remarked two analysts from ING Bank.
The attack comes days after Ukraine struck one of Russia’s largest oil exporting terminals in Primorsk.
The Primorsk terminal handles “almost half” of Russia’s seaborne crude oil exports, according to ANZ Bank’s senior commodity strategist Daniel Hynes. “The attacks were part of a 200-plus drone raid centred on the Leningrad region,” Hynes said.
Downward pressure:
The International Energy Agency (IEA) has projected the global oil market to stay heavily oversupplied, as weak demand continues to outweigh the pace of supply returning to the market.
Brent crude has felt some downward pressure, “amid softening demand and persistent concerns over a looming global supply surplus,” ING Bank’s analysts said.
The IEA now expects global oil supply to grow by 2.7 million b/d to average 105.8 million b/d in 2025 and rise by another 2.1 million b/d to average about 107.9 million b/d in 2026.
“The IEA also revised up its oil supply growth estimates primarily due to the return of OPEC+ supply,” ING Bank’s analysts added.
Earlier this month, OPEC+ oil producers group agreed to collectively increase supply by 137,000 b/d in October.
By Aparupa Mazumder
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