Oil Prices Slip as Critical Russian Port Comes Back Online

Oil prices moved little successful aboriginal Asian trading connected Monday, erasing the humble gains posted past week, arsenic crude loadings resumed astatine the cardinal Russian export hub of Novorossiysk pursuing a two-day suspension of operations astatine the Black Sea port. At the clip of writing, front-month Brent crude futures had dropped by 64 cents to $63.75 per barrel, portion WTI crude futures were trading astatine $59.43 per barrel, down 66 cents from Friday’s close.

Last week’s rally of much than 2% for some benchmarks was underpinned by a disruption astatine Novorossiysk and a neighbouring terminal operated by the Caspian Pipeline Consortium. The resumption of loading operations astatine Novorossiysk was confirmed by manufacture sources and supported by information from LSEG, signalling that the contiguous proviso unit had eased.

That said, the broader discourse remains 1 of conflicting signals. On the 1 hand, Ukrainian forces proceed their run of attacks against Russian lipid infrastructure, with Ukraine striking the Ryazan refinery connected Saturday. On the different hand, the marketplace is grappling with a increasing cognition of oversupply, driven successful ample portion by the output decisions of OPEC+.

Further complicating the backdrop are sanctions-related risks and upstream U.S. accumulation activity. Western sanctions targeting Russian lipid firms specified arsenic Lukoil and Rosneft are acceptable to deepen aft 21 November, and U.S. officials are considering authorities to penalize immoderate state doing concern with Russia. Meanwhile, the U.S. rig counts roseate by 3 to 417 successful the week to 14 November, according to information from Baker Hughes, indicating a humble uptick successful upstream activity.

While the instrumentality of exports astatine Novorossiysk removed an contiguous menace to supply, the underlying vulnerabilities remain. Continued attacks connected Russian export infrastructure, the effect of sanctions, and the guardant accumulation ramp by OPEC+ are each factors that volition support traders connected their toes this week.

By Charles Kennedy for Oilprice.com

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