Oil climbs more than 1% as Russian port suspends oil exports after Ukrainian attack
A drone view shows oil pumpjacks and tanks in a farmer’s field near Kindersley, Saskatchewan, Canada September 5, 2024. REUTERS/Todd Korol
LONDON :Oil prices climbed more than 1 per cent on Friday, boosted by supply fears after the Black Sea port of Novorossiysk halted oil exports following a Ukrainian drone attack that hit an oil depot in the major Russian energy hub.
Brent crude futures were up 87 cents, or 1.4 per cent, at $63.88 a barrel by 1221 GMT, while U.S. West Texas Intermediate crude advanced 93 cents, or 1.6 per cent, to $59.62 a barrel.
Both benchmarks rose more than 2 per cent earlier in the trading session but pared some gains.
Friday's attack damaged a ship in port, apartment blocks and an oil depot in Novorossiysk, injuring three of the vessel's crew, Russian officials said.
The port paused oil exports and oil pipeline monopoly Transneft suspended crude supplies to the outlet, two industry sources told Reuters.
"The intensity of these attacks has increased, it's much more often. Eventually they could hit something that causes lasting disruption," said Giovanni Staunovo, commodity analyst at UBS.
The market is trying to assess the impact of the latest attacks and what this means for Russian supply longer term, he said.
Industry sources say crude oil shipments via Novorossiysk reached 3.22 million tonnes, or 761,000 barrels a day, in October, with a total of 1.794 million tonnes of oil products exported.
Brent was on track to rise on the week, gaining 0.4 per cent so far. WTI was down 0.3 per cent.
The price increases came after both Brent and WTI fell about 3 per cent on Wednesday, weighed down by an OPEC report that global oil supply would match demand in 2026, in a further shift from its earlier projections of a supply deficit.
On Thursday, the U.S. Energy Information Administration reported a larger-than-expected rise in U.S. crude stocks last week, while gasoline and distillate inventories fell less than expected. [EIA/S]
Crude inventories rose by 6.4 million barrels to 427.6 million barrels in the week that ended on November 7, the EIA said, versus Reuters poll expectations for a gain of 1.96 million barrels.
Investors are also watching the impact of Western sanctions on Russian oil supply and trade flows.
The U.S. imposed sanctions banning deals with Russian oil companies Lukoil and Rosneft after November 21 as part of efforts to bring the Kremlin to peace talks over Ukraine.
About 1.4 million barrels per day of Russia's oil, or almost a third of seaborne export potential, has been added to stocks held on tankers as unloading slows due to the U.S. sanctions against Rosneft and Lukoil, JPMorgan said on Thursday.
Unloading cargoes could become much more challenging after the November 21 cut-off to receive oil supplied by the companies, the bank added.
