Oil gains as traders fret about disruptions in US and Russia
A deal peace deal between Russia and Ukraine could ease the sanctions that have disrupted the flow of Russian oil shipments
19 February 2025 - 08:45
byArathy Somasekhar and Emily Chow
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Houston/Singapore — Oil prices edged up on Wednesday amid worry of oil supply disruptions in the US and Russia, and as markets awaited clarity on the Ukraine peace talks.
Brent crude futures were up 14c, or 0.2%, at $75.98 a barrel at 4.50am GMT, and possibly set for a third day of gains.
US West Texas Intermediate (WTI) crude futures for March rose 16c, or 0.2%, to $72.01, up 1.8% from the close on Friday after not settling on Monday because of the Presidents’ Day public holiday. The March contract expires on Thursday and the more active April contract gained 14c, or 0.2%, to $71.97.
“The psychologically important $70 level appears to have held firm, aided by the Ukrainian drone attack on the Russian oil pumping station and fears that cold weather in the US may curtail supply,” said IG market analyst Tony Sycamore.
“On top of that, there is some speculation that Opec+ may decide to delay its planned supply increase in April,” he said, referring to the Opec and allies.
Russia said oil flows through the Caspian Pipeline Consortium (CPC), a major route for crude exports from Kazakhstan, were reduced by 30%-40% on Tuesday after a Ukrainian drone attack on a pumping station. A 30% cut would equate to the loss of 380,000 barrels a day (bbl/day) of supply to the market, according to Reuters calculations.
Meanwhile, cold weather threatened US oil supply, with the North Dakota Pipeline Authority estimating that production in the country’s number three producing state would be down by as much as 150,000bbl/day.
US President Donald Trump’s administration said on Tuesday it had agreed to hold more talks with Russia on ending the war in Ukraine. A deal could ease or help remove sanctions that have disrupted the flows of Russian oil shipments.
Analysts at Goldman Sachs said a potential Ukraine-Russia peace deal and associated easing in sanctions on Russia was unlikely to significantly raise Russian oil flows.
“We believe that Russian crude oil production is constrained by its Opec+ 9-million barrels per day production target rather than current sanctions, which are affecting the destination but not the volume of oil exports,” they said in a report.
Israel and Hamas would also begin indirect negotiations on a second stage of the Gaza ceasefire deal, officials said on Tuesday.
However, Trump said on Tuesday he intended to impose car tariffs “in the neighbourhood of 25%” and similar duties on semiconductors and pharmaceutical imports. Tariffs could raise prices for consumer products, weaken the economy and reduce demand for fuel.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil gains as traders fret about disruptions in US and Russia
A deal peace deal between Russia and Ukraine could ease the sanctions that have disrupted the flow of Russian oil shipments
Houston/Singapore — Oil prices edged up on Wednesday amid worry of oil supply disruptions in the US and Russia, and as markets awaited clarity on the Ukraine peace talks.
Brent crude futures were up 14c, or 0.2%, at $75.98 a barrel at 4.50am GMT, and possibly set for a third day of gains.
US West Texas Intermediate (WTI) crude futures for March rose 16c, or 0.2%, to $72.01, up 1.8% from the close on Friday after not settling on Monday because of the Presidents’ Day public holiday. The March contract expires on Thursday and the more active April contract gained 14c, or 0.2%, to $71.97.
“The psychologically important $70 level appears to have held firm, aided by the Ukrainian drone attack on the Russian oil pumping station and fears that cold weather in the US may curtail supply,” said IG market analyst Tony Sycamore.
“On top of that, there is some speculation that Opec+ may decide to delay its planned supply increase in April,” he said, referring to the Opec and allies.
Russia said oil flows through the Caspian Pipeline Consortium (CPC), a major route for crude exports from Kazakhstan, were reduced by 30%-40% on Tuesday after a Ukrainian drone attack on a pumping station. A 30% cut would equate to the loss of 380,000 barrels a day (bbl/day) of supply to the market, according to Reuters calculations.
Meanwhile, cold weather threatened US oil supply, with the North Dakota Pipeline Authority estimating that production in the country’s number three producing state would be down by as much as 150,000bbl/day.
US President Donald Trump’s administration said on Tuesday it had agreed to hold more talks with Russia on ending the war in Ukraine. A deal could ease or help remove sanctions that have disrupted the flows of Russian oil shipments.
Analysts at Goldman Sachs said a potential Ukraine-Russia peace deal and associated easing in sanctions on Russia was unlikely to significantly raise Russian oil flows.
“We believe that Russian crude oil production is constrained by its Opec+ 9-million barrels per day production target rather than current sanctions, which are affecting the destination but not the volume of oil exports,” they said in a report.
Israel and Hamas would also begin indirect negotiations on a second stage of the Gaza ceasefire deal, officials said on Tuesday.
However, Trump said on Tuesday he intended to impose car tariffs “in the neighbourhood of 25%” and similar duties on semiconductors and pharmaceutical imports. Tariffs could raise prices for consumer products, weaken the economy and reduce demand for fuel.
Reuters
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