Oil inches up on Kazakhstan supply disruption
Shafaq News/ Brent crude oil prices advanced on Tuesday adding to gainsin the previous session after a drone attack on an oil pipeline pumping stationin Russia reduced flows from Kazakhstan, but gains were capped on the prospectsof supply rising soon.
Brent crude futures gained 15 cents, or 0.2%, to $75.37 per barrel at0454 GMT.
U.S. West Texas Intermediate crude futures were up 67 cents fromFriday's close at $71.41 a barrel. There was no settlement for WTI on Mondaydue to the U.S. Presidents' Day holiday.
"The overriding theme driving oil prices lately has been aroundsupply expectations. With the weakness in prices over the past weeks, news of adrone strike on Kazakhstan’s export pipeline in Russia has provided thecatalyst for some bearish sentiment to unwind," IG market strategist YeapJun Rong said in an email.
The drone strike on the Kropotkinskaya station in Russia's southernKrasnodar region reduced shipments from Kazakhstan to world markets by Westernfirms including Chevron (CVX.N), opens new tab and Exxon Mobil (XOM.N), opensnew tab, operator Caspian Pipeline Consortium said on Monday.
The Black Sea CPC Blend oil loading plan for February would remainunchanged, two sources familiar with the plan told Reuters.
"However, longer-term gains are likely to remain capped as themarket may anticipate higher supplies from OPEC+ and Russia further down theroad, while improvement in demand outlook particularly from China still remainsuncertain, going by recent economic data," IG's Yeap said.
BMI analysts said in a note that they see Brent prices averaging $76 abarrel in 2025, down 5% from the 2024 average, because of market oversupply,tariffs and trade tensions.
OPEC+ producers are not considering delaying a series of monthly oilsupply increases scheduled to begin in April, according to a Russian statemedia report.
In December, OPEC had pushed back a plan to begin raising output toApril, due to weak demand and rising supply outside the group.
Markets were also waiting to see if Russia-Ukraine peace talks will bearfruit, as U.S. and Russian officials meet for talks in Saudi Arabia later onTuesday.
"There is seemingly plenty to be bearish about in the crude market,the biggest factor now being the outcome of Ukraine negotiations. Russian oilmay partially come back to the legitimate market, though there are of coursemany permutations as to the end result here," said Sparta Commoditiesanalyst Neil Crosby.
(Reuters)
