NEW YORK: Oil prices rose on Wednesday as the market focused on potential supply disruptions from US sanctions on Russian energy companies and tankers carrying Russian oil.
Brent crude futures were up 80 cents, or 1%, at $80.72 a barrel by 11:00 a.m. EST (1600 GMT). US West Texas Intermediate crude was $1.14, or 1.47%, higher at $78.64.
The latest round of US sanctions on Russian oil could disrupt Russian oil supply and distribution significantly, the International Energy Agency said in its monthly oil market report on Wednesday, adding that “the full impact on the oil market and on access to Russian supply is uncertain.”
A fresh round of sanctions angst seems to be supporting prices, along with the prospect of a weekly US stockpile draw, said Ole Hansen, head of commodity strategy at Saxo Bank. “Tankers carrying Russian crude seem to be struggling offloading their cargoes around the world, potentially driving some short-term tightness,” he added.
The key question remains how much Russian supply will be lost in the global market and whether alternative measures can offset the shortfall, said IG market strategist Yeap Jun Rong.
OPEC meanwhile expects global oil demand to rise by 1.43 million barrels per day in 2026, maintaining a similar growth rate to 2025, the producer group said on Wednesday. The 2026 forecast aligns with OPEC’s view that oil demand will keep rising for the next two decades. That is in contrast with the IEA, which expects demand to peak this decade as the world shifts to cleaner energy. The market also found some support from a drop in US crude oil stocks last week, market sources said, citing American Petroleum Institute (API) figures on Tuesday.
Crude stocks fell by 2.6 million barrels last week, while gasoline inventories rose by 5.4 million barrels and distillates climbed by 4.88 million barrels, API sources said. Supporting prices on Wednesday, US consumer prices rose slightly above expectations in December, heightening expectations for more interest rate cuts by the Federal Reserve. Lower interest rates can boost economic growth and demand for oil.
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