Brent moves higher amid geopolitical jitters
The front-month ICE Brent contract has gained by $1.00/bbl on the day, to trade at $68.65/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Two major oil ports on Russia’s Black Sea coast – Caspian Pipeline Consortium (CPC) terminal and the Sheskharis facility – have temporarily halted the loading of tankers, following warnings of drone attacks, Bloomberg reported.
The renewed attack warnings highlight the growing impact of Ukraine’s sustained strikes on Russia’s energy infrastructure and have put upward pressure on Brent’s price today.
It is estimated that both facilities export “well over” 2 million b/d of Russian and Kazakh oil to global markets, “holding a major share of the world’s petroleum supply chain,” said two analysts from ING Bank.
Brent gained further after the US Energy Information Administration (EIA) reported a 600,000-bbl draw in US crude stocks.
The data showed "a larger-than-expected drop in US crude oil inventories,” the two ING analysts said. A drop in US crude stocks typically indicates higher demand and can lend some support to Brent's price.
Downward pressure:
Oil market participants are somewhat concerned over supply fundamentals, as additional barrels from Iraq and Kurdistan are expected to enter circulation, adding downward pressure on Brent.
Crude oil flows from Iraqi Kurdistan are expected to resume soon, as eight oil firms struck a deal with Iraq's federal government and Kurdistan Regional Government yesterday, Reuters reported.
The announcement has “paved the way for resumption of Kurdish crude exports from Ceyhan within days,” remarked VANDA Insights’ founder Vandana Hari.
By Aparupa Mazumder
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