March 18, 2024 (MLN): Oil prices rose during the early trading hours of Monday on potential supply disruptions arising from further attacks on Russian energy infrastructure.
Brent crude traded near $85.14 per barrel, up by 0.39% on the day.
While West Texas Intermediate crude (WTI) was at $80.85 per barrel, up by 0.44% on the day.
Both benchmarks gained over 3.85% last week amid an unexpected decline in U.S. stockpiles.
"The strikes on Russian refineries added $2-$3 per barrel of risk premium to crude last week, which remains in place as we start this week with more attacks over the weekend," said Vandana Hari, founder of oil market analysis provider Vanda Insights, as Reuters reported.
But for the next substantial move up or down, crude will await fresh signals, Hari added.
On Saturday, one of the strikes sparked a brief fire at the Slavyansk refinery in Kasnodar, which processes 8.5 million metric tons of crude oil a year, or 170,000 barrels per day.
In the Middle East, Israeli Prime Minister Benjamin Netanyahu confirmed on Sunday he will proceed with plans to push into Gaza's Rafah enclave where more than 1 million displaced people are sheltering, defying pressure from Israel's allies.
German Chancellor Olaf Scholz said the step would make regional peace "very difficult".
This week, investors are eyeing the outcome of the U.S. Federal Reserve's two-day meeting that ends on Wednesday. That will bring more clarity on the timing of interest rate cuts, Tony Sycamore, a market analyst with IG, wrote in a note.
The Fed will likely keep rates unchanged this month, while the possibility of interest rate cuts at the June meeting "is now a coin flip," Sycamore said.
Lower interest rates would stimulate demand in the U.S., the world's biggest oil consumer, supporting oil prices.
Both benchmark oil contracts posted gains last week despite a dip on Friday. Oil been rangebound for much of the last month, but on Thursday a bullish demand report from the International Energy Agency sent prices rising to their highest level since November.
The agency, which represents industrialized countries, had strengthened its demand outlook for the fourth time since November as Houthi attacks in the Red Sea drove crude and fuel carriers to divert, reducing the oil accessible to users.
For the first time, IEA also predicted a slight supply deficit this year, instead of a surplus.
U.S. fuel demand also supported prices as refineries completed some projects.
As of Friday's close, Brent and WTI futures were up 11% and 13%, respectively, in 2024.
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Posted on: 2024-03-18T10:22:15+05:00
