By Colleen Howe and Trixie Yap
(Reuters) – Brent crude oil costs superior on Tuesday including to positive aspects within the earlier session after a drone assault on an oil pipeline pumping station in Russia lowered flows from Kazakhstan, however positive aspects have been capped on the prospects of provide rising quickly.
Brent crude futures gained 15 cents, or 0.2%, to $75.37 per barrel at 0454 GMT.
U.S. West Texas Intermediate crude futures have been up 67 cents from Friday’s shut at $71.41 a barrel. There was no settlement for WTI on Monday as a result of U.S. Presidents’ Day vacation.
“The overriding theme driving oil costs recently has been round provide expectations. With the weak spot in costs over the previous weeks, information of a drone strike on Kazakhstan’s export pipeline in Russia has offered the catalyst for some bearish sentiment to unwind,” IG market strategist Yeap Jun Rong mentioned in an e-mail.
The drone strike on the Kropotkinskaya station in Russia’s southern Krasnodar area lowered shipments from Kazakhstan to world markets by Western corporations together with Chevron and Exxon Mobil, operator Caspian Pipeline Consortium mentioned on Monday.
The Black Sea CPC Mix oil loading plan for February would stay unchanged, two sources aware of the plan instructed Reuters.
“Nevertheless, longer-term positive aspects are prone to stay capped because the market could anticipate increased provides from OPEC+ and Russia additional down the street, whereas enchancment in demand outlook notably from China nonetheless stays unsure, going by latest financial knowledge,” IG’s Yeap mentioned.
BMI analysts mentioned in a observe that they see Brent costs averaging $76 a barrel in 2025, down 5% from the 2024 common, due to market oversupply, tariffs and commerce tensions.
OPEC+ producers should not contemplating delaying a sequence of month-to-month oil provide will increase scheduled to start in April, in response to a Russian state media report.
In December, OPEC had pushed again a plan to start elevating output to April, on account of weak demand and rising provide outdoors the group.
Markets have been additionally ready to see if Russia-Ukraine peace talks will bear fruit, as U.S. and Russian officers meet for talks in Saudi Arabia afterward Tuesday.
“There may be seemingly loads to be bearish about within the crude market, the largest issue now being the end result of Ukraine negotiations. Russian oil could partially come again to the legit market, although there are after all many permutations as to the tip outcome right here,” mentioned Sparta Commodities analyst Neil Crosby.
(Reporting by Colleen Howe; Enhancing by Michael Perry and Sonali Paul)