NEW YORK: Oil prices were little changed on Tuesday as investors took a more mixed view toward the loss of Russian refinery capacity after recent Ukrainian attacks while a slightly weaker US dollar offered some support.
Front-month Brent crude futures due to expire on Thursday were 12 cents down at $86.63 a barrel by 11:59 EDT (1559 GMT) while US West Texas Intermediate (WTI) crude futures was up 13 cents at $82.08. The more actively traded Brent futures for June were down 12 cents at $85.96.
Brent rose 1.5% on Monday while WTI gained 1.6% after Russia’s government ordered companies to cut output in the second quarter to meet a 9 million barrels per day (bpd) target to comply with pledges to the OPEC+ consumer group. Russia, among the top three global oil producers and one of the largest exporters of oil products, is also contending with a spate of recent attacks on its oil refineries by Ukraine and has mounted its own attacks on Ukrainian energy infrastructure.
Russian oil refining capacity shut down by Ukrainian attacks has reached 14% of the country’s total capacity, Reuters calculations showed on Tuesday. “Gasoline is seeing the support of reduced availability to the global market from curtailed Russian exports that has filtered through to the US,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
FGE analysts expect a structural decline in Russian refinery runs and do not see them regaining 2023 levels even in the second half of this year, they wrote in a note. Meanwhile, a slightly weaker US dollar offered some support to oil prices.
A weaker dollar typically makes oil cheaper for oil buyers holding other currencies. OPEC+ is unlikely to make any oil output policy changes until a full ministerial gathering in June, three OPEC+ sources told Reuters ahead of next week’s gathering of ministers that is not expected to make any policy recommendations Rising geopolitical premiums as the Israel-Gaza conflict continues were also supportive of prices. Iran-backed Houthi militants on Tuesday said they had mounted six attacks on ships in the Gulf of Aden and the Red Sea over the past 72 hours.
Comments
Comments are closed.