Oil prices hit four-month highs on Tuesday after breaking above range-bound trading last week, but gains were capped by the prospect of rising exports from Russia as Ukrainian attacks on oil infrastructure curb domestic refining activity. The Brent crude oil futures contract for May delivery was up 33 cents at $87.22 a barrel while U.S. West Texas Intermediate (WTI) prices were up 31 cents at $82.47. The WTI April contract, which expires on Wednesday, was up 31 cents at $83.03.
Both benchmarks hit highs not reached since early November, buoyed by lower crude exports from Saudi Arabia and Iraq as well as signs of stronger demand and economic growth in China and the United States. “Oil demand data surprising on the positive side and the extension of the voluntary OPEC+ cuts until the end of June have supported prices,” said UBS analyst Giovanni Staunovo.
“Brent will likely trade in an $80-90 per barrel range this year, with an end-June forecast of $86 per barrel.” In Russia, exports are rising after Ukrainian drone attacks on the country’s oil infrastructure, pressuring prices. “Attacks will likely reduce Russian crude runs by up to 300,000 barrels per day, in addition to scheduled maintenance closures,” JP Morgan analysts wrote. Lower primary runs, however, would lead to higher crude oil exports.” Russia will increase oil exports through its western ports in March by almost 200,000 barrels per day, against a monthly plan for 2.15 million bpd. Prices were also weighed down by uncertainty over U.S. interest rates ahead of this week’s Federal Reserve policy meeting. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Reuters
