Brent gains following Ukrainian drone strike in Russia’s Novorossiysk

The front-month ICE Brent contract has gained by $1.19/bbl on the day, to trade at $63.71/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent crude has edged higher following renewed Ukrainian drone strikes on key Russian energy infrastructure.

Supply fears have resurfaced after a Ukrainian drone attack hit an oil depot in the major Russian export hub of Novorossiysk, Reuters reported.

The strike has damaged a ship, apartment buildings, an oil depot in Novorossiysk and injured three crew members of the vessel, the report added.

“Crude futures leapt up… on the back of reports of Ukrainian drone strikes causing fire and damage at Russia’s major Black Sea port of Novorossiysk overnight,” remarked VANDA Insights’ founder Vandana Hari.

Downward pressure:

Brent crude’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported another surge in US crude stocks.

Commercial US crude oil inventories increased by 6.4 million bbls to 428 million bbls for the week ending 7 November, according to data from the EIA.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

Two analysts from ING Bank said that the EIA report was “bearish” and the inventory build was “larger than expected”.

By Aparupa Mazumder

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