Oil Steadies With Focus On Russian Crude Flows, Refinery Strikes

Oil was little changed after notching a modest drop last week, as traders gauge the impact of European Union moves on Russian supply and strikes by Ukraine on the OPEC+ member’s energy infrastructure. 

Brent traded above $66 a barrel after losing 0.5% last week, while West Texas Intermediate was near $63. The EU’s next round of sanctions against Russia will focus on oil industry entities in so-called third countries, affecting about a dozen Chinese and several Indian bodies as the bloc looks to intensify pressure on the Kremlin’s access to petrodollars.

“We are now going after those who fuel Russia’s war by purchasing oil in breach of the sanctions,” European Commission President Ursula von der Leyen told reporters on Friday. “We target refineries, oil traders, petrochemical companies in third countries, including China.” 

China and India have made the most of discounted Russian supplies accessible under a Group of Seven price-cap mechanism that was designed to keep oil flowing while limiting Moscow’s revenues. While President Donald Trump on Saturday renewed his call for European countries to stop buying energy from Russia, French President Emmanuel Macron said the EU’s remaining energy imports from the nation were “very marginal.” 

Meanwhile, Ukraine claimed strikes that damaged energy infrastructure deep within Russian territory on Saturday, including a trunk oil pipeline and two refineries. Kyiv has intensified the drone attacks over the past month. 

“The EU member approvals of the sanctions plan will take time and the draft could change in the process. The market is unlikely to react preemptively,” said Vandana Hari, the founder of of market analysis firm Vanda Insights in Singapore, adding that investors will keep a close eye on Ukrainian attacks on Russian oil facilities especially ports.

Crude prices have remained within a $5 range since early August as traders balance forecasts for a glut later in the year against geopolitical risks. An amicable exchange between US President Donald Trump and Chinese President Xi Jinping on Friday eased tensions between the two biggest oil consumers, and reduced concerns that Washington would place levies on Beijing for buying Russian crude. 

Prices:

• Brent for November settlement advanced 0.3% to $66.85 a barrel at 8:35 a.m. in Singapore.

• .WTI for October delivery, which expires Monday, added 0.3% to $62.87 a barrel.

  • The more active November contract gained 0.2% to $62.55.