Oil prices surged to their highest levels in four months, propelled by a breakout from recent range-bound trading. However, the upward momentum was tempered by the anticipation of heightened exports from Russia due to Ukrainian assaults on oil facilities hindering domestic refining operations.
As of 1320 GMT, the Brent crude oil futures contract for May delivery rose by 33 cents to $87.22 a barrel, while US West Texas Intermediate (WTI) prices climbed by 31 cents to $82.47.
Both benchmarks reached peaks unseen since early November, driven by reduced crude exports from Saudi Arabia and Iraq, alongside indications of robust demand and economic expansion in China and the United States.
According to UBS analyst Giovanni Staunovo, positive surprises in oil demand data and the extension of voluntary OPEC+ production cuts until the end of June have underpinned prices. Staunovo forecasts Brent to fluctuate within a range of $80-90 per barrel this year, with a projection of $86 per barrel by the end of June.
In Russia, exports are on the rise following Ukrainian drone attacks on the nation’s oil infrastructure, which has applied pressure on prices. JP Morgan analysts anticipate a reduction in Russian crude processing of up to 300,000 barrels per day due to the attacks and scheduled maintenance shutdowns, consequently leading to increased crude oil exports.
Russia is set to boost oil exports through its western ports in March by nearly 200,000 barrels per day, surpassing the monthly target of 2.15 million barrels per day.
Uncertainty surrounding US interest rates ahead of the Federal Reserve policy meeting this week also contributed to the downward pressure on prices.
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