Oil rises to multi-month highs on Russian supply concerns (updated)

USU Ventures AG

19/03/2024 05:03

* 
      US oil futures gain 1.1% to highest since Oct; Brent up
0.7%
    

        * 
      Russian refinery issues could hit crude output - analyst
    

        * 
      Lower Saudi exports, improving demand signals support oil
prices
    

  
 (Updates prices at 1806 GMT)
    By Shariq Khan
       NEW YORK, March 19 (Reuters) - Oil prices rose to
multi-month highs for the second straight session on Tuesday, as
traders assessed how Ukraine's recent attacks on Russian
refineries would affect global petroleum supplies.
        U.S. West Texas Intermediate crude futures  CLc1  rose
to their highest since October, up by 94 cents, or 1.1%, to
$83.66 a barrel by 2:06 p.m. EST
     (1806 GMT)
    . 
  
        Global benchmark Brent crude  LCOc1  rose 62 cents, or
0.7%, to $87.51 a barrel, the highest since Nov. 3.
  
        Ukraine has stepped up attacks on Russian oil
infrastructure this year, with at least seven refineries
targeted by drones just this month. The attacks have shut down
7%, or around 370,500 barrels per day, of Russian refining
capacity, Reuters calculations show.
    While lower refining activity has led to an increase in
Russian crude oil exports, it could also lead to crude oil
production cuts as the country faces storage constraints, StoneX
energy analyst Alex Hodes said.
    Based on Hodes' calculations, the attacks on Russian
refineries could result in a decrease of around 350,000 bpd of
global petroleum supplies and boost U.S. crude prices by $3 per
barrel.
    Even if the attacks do not lead to a direct loss of Russian
crude supply, there is still a spillover effect for oil prices
from surging refined product margins, SEB Research analyst
Bjarne Schieldrop wrote on Monday.
    Oil gained support from declining crude exports from Saudi
Arabia and Iraq, as well as signs of stronger demand and
economic growth in China and the U.S.
    U.S. single-family homebuilding rebounded sharply in
February, the Commerce Department reported. Homebuilding could
boost economic growth, supporting oil demand.
    "Oil demand data surprising on the positive side and the
extension of the voluntary OPEC+ cuts until the end of June have
supported prices," said UBS analyst Giovanni Staunovo.
    "Brent will likely trade in an $80-90 per barrel range this
year, with an end-June forecast of $86 per barrel," Staunovo
said.

 (Reporting by Shariq Khan in New York, Noah Browning in London
and Trixie Yap in Singapore
Additional reporting by Paul Carsten in London
Editing by Mark Potter, David Goodman and David Gregorio)
 ((Shariq.Khan@thomsonreuters.com; Twitter/X: @shariqrtrs;))