Oil settles up more than 2% as Russian port suspends oil exports after Ukrainian attack
Oil prices settled more than 2% higher on Friday as Russia’s port of Novorossiisk halted oil exports following a Ukrainian drone attack that hit an oil depot in the Russian energy hub, stoking supply concerns.
Brent crude futures settled up $1.38, or 2.19%, at $64.39 a barrel, while U.S. West Texas Intermediate crude settled up $1.40, or 2.39%, at $60.09 a barrel.
Brent rose 1.2% on the week, and WTI posted a weekly gain of around 0.6%.
Friday’s attack damaged a ship in port, apartment blocks and an oil depot in Novorossiisk, injuring three of the vessel’s crew, Russian officials said.
"The hit on that Russian terminal was huge and seems to have had a bigger impact than previous attacks," said Phil Flynn, senior analyst with Price Futures Group.
PORT EXPORTS 2% OF GLOBAL SUPPLY
The Russian port of Novorossiisk paused oil exports, equivalent to 2.2 million barrels per day, or 2% of global supply, and oil pipeline monopoly Transneft suspended crude supplies to the outlet, two industry sources told Reuters.
"The intensity of these attacks has increased; it’s much more often. Eventually, they could hit something that causes lasting disruption," said Giovanni Staunovo, commodity analyst at UBS.
Ukraine on Friday said it separately struck an oil refinery in Russia’s Saratov region and a fuel storage facility in nearby Engels overnight.
Investors are trying to assess the impact of the latest attacks and what they mean for Russian supply longer term, he said.
Investors are also watching the impact of Western sanctions on Russian oil supply and trade flows.
Britain on Friday issued a special licence allowing businesses to continue working with two Bulgarian subsidiaries of sanctioned Russian oil firm Lukoil, as the Bulgarian government seized control of the assets.
The U.S. imposed sanctions banning deals with Russian oil companies Lukoil and Rosneft after November 21 as part of efforts to bring the Kremlin to peace talks over Ukraine.
About 1.4 million bpd of Russia’s oil, or almost a third of seaborne export potential, has been added to stocks held on tankers as unloading slows due to the U.S. sanctions against Rosneft and Lukoil, JPMorgan said on Thursday.
Source: Reuters.com
