Stability in Oil Prices After Three Days of Gains

SadaNews - Oil prices stabilized after three days of gains, as investors assess the implications of the recent Ukrainian strikes on Russian oil facilities, amid expectations of a surplus in supply in the coming months.

Brent crude traded above $68 per barrel after a 3.2% rise over the past three sessions, while West Texas Intermediate crude hovered around $64. This followed Ukraine's targeting of the "Saratov" refinery in its latest attacks on Russian energy infrastructure, a facility considered one of the country's main refineries.

According to "Goldman Sachs", these recurring strikes have contributed to reducing Russia's output, a member of the "OPEC+" alliance, to its lowest levels since the COVID pandemic.

Despite the recent increases, prices remain confined within a range not exceeding $5 per barrel since early August, due to a tug-of-war between escalating geopolitical tensions and expectations of rising global supply, amid a rapid return of production from "OPEC+" countries.

In parallel, the European Commission is considering imposing sanctions on companies in China and India that facilitate the trade of Russian oil, as part of a new package of restrictions aimed at increasing pressure on the Kremlin. European Commission President Ursula von der Leyen stated that the EU will be proposed to accelerate the phase-out of imports of Russian fossil fuels.

Mukesh Sadhaf, CEO of the analysis firm "Xanalysts" based in Sydney, said: "The geopolitical momentum supporting prices—especially the dual strikes targeting Russian oil export terminals and refineries—will continue to support the market," adding that "OPEC's actions to control supplies may limit gains."

On another note, a preliminary industrial report in the United States showed a decline in crude inventories by 3.4 million barrels last week, the largest drop in a month, awaiting confirmation through official data later today.

In the futures markets, Brent's implied volatility for the second contract remained at its lowest levels in more than three weeks, as spot prices continue to rotate within a narrow trading range since early August.