Oil Edges Higher in Aimless Trade as Supply Uncertainties Rise
Uncertainties about crude supplies from Russia, Kazakhstan and OPEC+ pushed oil prices higher.
West Texas Intermediate edged above $72 a barrel, extending gains to the highest closing price in a week. The rally is being driven by a slew of crude supply concerns from across the Atlantic and with a key technical level providing a floor for losses.
OPEC+ is considering pushing back its planned output increase due in April, potentially the fourth time it has delayed bringing back production. Adding to the prospect of tighter supplies, as much as 30% of oil exports from a major Kazakh pipeline to the Black Sea may be halted after a Ukrainian drone attacked a pumping station in Russia. The Group of Seven also is considering tightening the price cap on Russian crude exports, possibly curbing supplies further.
Even with the recent gains, crude has swung aimlessly in a $5 range this month, with a gauge of implied volatility declining to the lowest since July. Oil topped $80 earlier this year on cold weather and tighter sanctions, only to fall after Trump’s tariff threats rattled markets. The 100-day moving average at around $71.43 has supported crude prices from declining further.
“It’s a dead market, in general, and going nowhere in the most violent way,” said Scott Shelton, an energy specialist at TP ICAP Group Plc.
Traders are also monitoring the possible return of several hundred thousand barrels a day of Iraqi crude flowing via Kurdistan, but Turkey — home to the port the supplies would eventually be shipped from — said it has yet to hear about a restart. Elsewhere, Trump said Chevron Corp.’s ability to continue exporting crude from Venezuela is under review, underscoring continued tensions that could spill over to energy.
“Oil’s upside hedging demand is re-emerging,” said Razan Hilal, a market analyst at Forex.com. “Traders are positioning for uncertain impacts stemming from a mix of sanctions, tariffs, and geopolitical instability.”
WTI for March delivery gained 0.6% to settle at $72.25 a barrel in New York. Brent for April settlement rose 0.3% to settle at $76.04 a barrel.
Source : Bloomberg
