Brent moves higher on supply disruption concerns
The front-month ICE Brent contract has moved $0.84/bbl higher on the day, to trade at $76.45/bbl at 09.00 GMT.
PHOTO: Oil barrels. Getty Images
Upward pressure:
Brent futures continued to gain support from concerns over supply disruptions in Kazakhstan.
Several Ukrainian drones struck PS Kropotkinskaya earlier this week, temporarily shutting it down. That is the oil transportation facility of Russia-based pipeline operator Caspian Pipeline Consortium (CPC).
The facility is located in the Kavkazsky district of southern Russia and transports over two-thirds of all oil exports from Kazakhstan, and crude from Russian oil fields, including those in the Caspian Region, CPC said.
“There are concerns over Kazakh oil flows given the repair work needed at a pumping station in Russia damaged by a Ukrainian drone attack,” two analysts from ING Bank remarked. “It is estimated to take 2 months,” they added.
Oil prices gained more support after a Bloomberg report suggested that the OPEC+ members may consider delaying the supply hike set to begin in April. The Saudi Arabia-led group has postponed its decision to increase production three times since initially outlining a plan to bring 2.2 million b/d supply back to the market.
“Today oil prices are supported by reports that OPEC may delay its production increase due to a weak global market,” Price Futures Group’s senior market analyst Phil Flynn said.
Downward pressure:
Peace talks have started between the US and Russia in Riyadh, according to reports. This news has put some downward pressure on Brent’s price today.
US President Donald Trump's administration said that it has agreed to hold further talks with Moscow on reaching a ceasefire agreement in Ukraine after yesterday’s meeting that excluded participation from Kyiv.
“The US and Russia agreed to appoint teams to negotiate a settlement to the Ukraine war,” VANDA Insights’ founder and analyst Vandana Hari remarked.
If finalized, the deal could help alleviate sanctions on Russia’s energy sector, that have been disrupting global supply chains.
By Aparupa Mazumder
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