Oil Rises Slightly: Russian Refinery Attacked, Rate Cut Impact Reduced
Oil prices edged higher in a volatile session as market participants weighed the impact of the Fed's interest rate cut and supply risks from Russia. WTI added 0.5% to hold above $64/barrel, tracking a rally in risk assets after a 25 bps cut on Wednesday.
On the supply side, two Russian refineries—Salavat and Volgograd—were targeted by attacks on Thursday. The ~300,000 bpd Volgograd refinery reportedly halted operations, sparking concerns about a tightening global balance sheet and squeezing Moscow's petrodollar flows. The series of attacks brought Russian refining runs down below 5 million bpd—the lowest since April 2022 (JPMorgan estimate)—while the EU prepared a new sanctions package and the US signaled it was awaiting European action.
From a macro perspective, optimism about monetary easing supported sentiment, especially as stronger-than-expected US jobs data eased concerns over Jerome Powell's earlier comments. However, as several analysts have noted, the market's focus has returned to sanctions and geopolitics, which are "overwriting" the still-fragile fundamentals.
In the US, distillate stocks rose to their highest level since January, and crude oil exports surged to their highest since late 2023. The tug-of-war between supply risks, a tight spot market, and surplus projections has kept prices trapped in a narrow range—around the $5 band, which has held since early August—amid the return of OPEC+ supply and the economic impact of US trade tariffs.
Key points:
WTI +0.5% > $64; sentiment helped by the Fed's 25-bps cut.
Volgograd refinery (±300,000 bpd) shuts down; Russian runs <5 million bpd (lowest since April 2022).
Risk-on sentiment vs. fragile fundamentals: US distillate stocks rise, crude exports surge.
Prices remain range-bound in the ~$5 band since early August; geopolitical risk vs. potential surplus.
Source: Newsmaker.id
