Home Oil and Gas Brent crude oil trades above $85 for a third straight session

Brent crude oil trades above $85 for a third straight session

by Business News Report

Oil futures rose on Monday, finding support as continued attacks by Ukraine on Russian energy facilities were estimated to have idled a significant chunk of Russia’s refining capacity. West Texas Intermediate crude for April delivery edged up by 28 cents, or 0.4%, to $81.32 a barrel on the New York Mercantile Exchange. May Brent crude the global benchmark, was up 32 cents, or 0.4%, at $85.66 a barrel on ICE Futures Europe. Both Brent and WTI futures were on track to finish the session at their highest levels since early November. April gasoline tacked on 1% to $2.7487 a gallon, while April heating oil climbed by 1.2% to $2.7593 a gallon. Natural gas for April delivery traded at $1.731 per million British thermal units, up 4.6%.

Crude prices rallied around 4% last week, lifted as a series of drone strikes by Ukraine forced the shutdown of Russian refining facilities. An attack on Sunday caused a brief fire at the Slavyansk refinery in Krasnodar, which processes around 170,000 barrels a day, according to Reuters “Preliminary estimates suggest that approximately 15% of Russia’s refining capacity has been disrupted in recent days, potentially leading to a short-term decrease in crude oil exports as authorities seek to mitigate the impact of the disruptions,” Stephen Innes, managing partner at SPI Asset Management, said in a note.

”These developments have contributed to the upward pressure on oil prices, underscoring the market’s vulnerability to geopolitical tensions and supply disruptions,” he said. The oil market also got a boost from some upbeat economic data out of China, which revealed  “faster-than-expected acceleration” of industrial production, the highest in three years, said Samer Hasn, market analyst at XS.com. News reports said that for the first two months of this year, China’s industrial production grew 7% from the same period last year. That boosted prospects for energy demand. Key events later this week, however, may “give longs some pause for thought,” said analysts at Zaner, in daily market commentary. “The prospect of hawkish comments and economic projections from the Federal Reserve on Wednesday could erode a positive demand outlook and put crude oil and the products back on the defensive,” they said.

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