Geopolitical flare-ups support Brent’s price gains
The front-month ICE Brent contract has gained by $0.09/bbl on the day, to trade at $68.05/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Brent crude’s price has continued to gain on the back of supply-side concerns after Ukraine struck Russia’s Baltic port of Ust-Luga last week, the latest in a series of attacks on energy infrastructure.
The drones allegedly hit Russia’s biggest nuclear power plant and started a huge fire at the port’s fuel export terminal, Reuters reports.
“Ukraine has attacked eight Russian refineries so far this month, raising concerns of fuel market tightness,” said ANZ Bank’s senior commodity strategist Daniel Hynes.
Besides, oil market jitters grow as US President Donald Trump renewed threats of tougher sanctions on Russia if it fails to reach a ceasefire deal soon.
“Trump said there needs to be more clarity within roughly two weeks,” remarked two analysts from ING Bank.
Downward pressure:
Money managers and hedge funds have reduced their net-long bets on ICE Brent futures for the third consecutive week to 19 August.
The decline in net-long positions comes as the oil market braces for the US-imposed 25% secondary tariffs on India’s purchases of Russian oil, set to take effect tomorrow.
Speculators sold a little short of 24,000 lots as of last Tuesday, decreasing net-long positions in Brent futures to about 182,000 lots, according to futures and options data from ICE Futures Europe.
A pullback in net-long positions usually weighs on prices, while an increase in such bets tends to provide support.
By Aparupa Mazumder
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