Brent Crude Oil Prices Rise Following Drone Attack on Pipeline in Russia
By Colleen Howe and Trixie Yap
Brent crude oil prices saw an uptick on Tuesday, building on gains from the previous session after a drone attack on an oil pipeline pumping station in Russia disrupted flows from Kazakhstan. However, the potential for increased supply in the near future tempered the price increase.
Brent crude futures climbed by 15 cents, or 0.2%, reaching $75.37 per barrel at 0454 GMT. Meanwhile, U.S. West Texas Intermediate crude futures rose by 67 cents to $71.41 a barrel.
Market strategist Yeap Jun Rong noted, “The overriding theme driving oil prices lately has been around supply expectations. The drone strike on Kazakhstan’s export pipeline in Russia has provided a catalyst for some bearish sentiment to unwind.”
The drone strike at the Kropotkinskaya station in Russia’s Krasnodar region led to reduced shipments from Kazakhstan to global markets by Western companies such as Chevron and Exxon Mobil, according to the Caspian Pipeline Consortium.
Despite the disruption, the Black Sea CPC Blend oil loading plan for February is expected to remain unchanged, as reported by sources familiar with the plan.
Looking ahead, there are concerns about potential oversupply in the market, as well as uncertainties surrounding demand, particularly from China. Analysts at BMI predict Brent prices to average $76 a barrel in 2025, down 5% from the 2024 average.
OPEC+ producers are not currently considering delaying a series of monthly oil supply increases set to begin in April, according to a report from Russian state media. In December, OPEC had postponed plans to raise output due to weak demand and increased supply from non-OPEC sources.
Market watchers are also keeping an eye on Russia-Ukraine peace talks, with U.S. and Russian officials meeting in Saudi Arabia for discussions. The outcome of these negotiations could have a significant impact on the crude oil market.
Analyst Neil Crosby from Sparta Commodities commented, “There is plenty to be bearish about in the crude market, with the outcome of Ukraine negotiations being a major factor. Russian oil may reenter the market to some extent, but the final result remains uncertain.”
Reporting by Colleen Howe; Editing by Michael Perry and Sonali Paul
