Oil prices saw an increase in early Asian trading on Wednesday, driven by disruptions in oil supplies from the United States and Russia, while markets await further clarity on peace talks in Ukraine.
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Market Movements:
Brent crude futures rose by 20 cents, or 0.3%, to reach $76.04 per barrel at 01:46 GMT, marking the third consecutive day of gains, according to Reuters data.
US West Texas Intermediate (WTI) crude for March increased by 23 cents, or 0.3%, to $72.08 per barrel, a 1.7% rise from Friday's close after no settlement on Monday due to the US Presidents' Day holiday. The March contract expires on Thursday, while the more actively traded April contract rose 0.3% to $72.04.
Supply Disruptions:
Russia reported that oil flows through the Caspian Pipeline Consortium, a major route for crude exports from Kazakhstan, dropped by 30-40% on Tuesday after a Ukrainian drone attack targeted a pumping station. This loss translates to approximately 380,000 barrels per day of supply.
In the United States, cold weather threatened oil production, with the North Dakota Pipeline Authority estimating a reduction of up to 150,000 barrels per day due to freezing temperatures in the state's third-largest oil-producing region.
Geopolitical Factors:
On the geopolitical front, the US administration under Donald Trump stated that it had agreed to further discussions with Russia about ending the war in Ukraine, which could potentially ease sanctions disrupting Russian oil shipments.
Additionally, Israel and Hamas are set to begin indirect negotiations regarding the second phase of a ceasefire agreement in Gaza.
However, Trump also expressed intentions to impose tariffs on cars and other imports like semiconductors and medicines, which could raise consumer goods prices, weaken the economy, and ultimately reduce demand for fuel.
