Oil Holds Three-Day Gain With Focus on Russian Supply Risks
(Bloomberg) -- Oil steadied after a three-day gain as traders assess the fallout from Ukrainian attacks on Russian crude infrastructure.
Brent was above $68 a barrel after gaining 3.2% in the previous three sessions, while West Texas Intermediate traded around $64. Ukraine attacked the Saratov refinery in its latest strike on Russian energy facilities — which have helped cut the OPEC+ member’s production to its lowest post-pandemic level, according to Goldman Sachs Group Inc.
The recent gains haven’t been enough to push oil out of the $5 band it has been in for most of the past month, buffeted between geopolitical tensions and bearish fundamentals. The accelerated return of OPEC+ supply has boosted predictions that a glut will form later in the year.
Meanwhile, the European Union is weighing sanctions on companies in India and China that are enabling Russia’s oil trade as part of an upcoming package of fresh restrictions to pressure Vladimir Putin to negotiate an end to the conflict. European Commission President Ursula von der Leyen said the group will propose speeding up the phase-out of Russian fossil fuel imports.
“This bullish geopolitical angle — especially the double whammy of Ukraine targeting both Russian export terminals and refineries — is going to support prices,” said Mukesh Sahdev, founder and chief executive officer of analysis firm Xanalysts in Sydney, However, OPEC moves to control supply will limit the upside, he said.
In the US, an industry report showed crude inventories fell by 3.4 million barrels last week. That would be the biggest drop in a month if confirmed by official data later on Wednesday.
Brent’s second-month implied volatility was subdued after it fell to the lowest in more than three weeks on Monday, as outright prices remain firmly stuck within the narrow range seen since early August.
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