Oil Surges Due To Volatile Trade In The Turmoil Of The CPC Pipeline

On May 21, 2018, at a fuel station in Mumbai, India, workers have a nozzle to feed gasoline into a vehicle. REUTERS / Francis Mascarenhas

CPC pipeline accounts for 1% of global supply
US stocks have fallen and production has been flat for the seventh straight week
Biden meets NATO allies on Thursday

London / New York, March 23 -Oil prices rose on Wednesday’s volatile trading, supported by the turmoil in Russia’s and Kazakh oil exports over the CPC pipeline.

Brent crude oil futures were up $ 6.35 (5.5%) at $ 121.80 a barrel at 11:00 EST (1400 GMT). Crude oil futures at West Texas Intermediate (WTI) rose $ 5.72 (5.2%) to $ 115 a barrel.

After the invasion of Ukraine, the market continues to dominate over the spillover effects of severe sanctions on Russia, the world’s second-largest oil exporter. The oil market has been volatile for several weeks, and after a sharp fall last week, current supply uncertainty has led to steady progress in recent crude oil futures.

Russia’s oil exports through the Caspian Pipeline Consortium (CPC) fell by up to 1 million barrels (bpd) per day, or 1% of world oil production, on Tuesday due to storm-damaged berths I warned you to do.read more

According to the shipping agent, CPC exports will stop completely on Wednesday and repairs will take at least a month and a half.read more

“Prices are rising primarily due to losses on CPC-blended crude oil exports from Novorossisk, which account for about 1.3 million barrels of exports per day, as Russia’s crude oil exports are finally declining. We’re adding more bullish fuel to the fire, “Matt said. Smith, Kpler’s Chief Oil Analyst in the Americas.

US President Joe Biden will announce further Russian sanctions, including a NATO emergency meeting, during a meeting with European leaders in Brussels on Thursday. Russia calls the aggression, which is now one month old, a “special operation.”read more

European Union member states are divided on whether to ban Russia’s imports of crude oil and petroleum products, which could change when short-term contracts expire.

At the FT Commodity Global Summit, Trafigura’s Ben Luckock said, “We will know what the total loss of oil in Russia is at the end of April.” He said oil could reach $ 200 a barrel.

Crude oil stockpiling in the United States, the world’s largest oil consumer, plummeted, raising concerns about supply.

US crude oil inventories fell 2.5 million barrels during the week ending March 18. Federal data show in comparison to expectations of a modest increase. Production was flat at 11.6 million barrels per day for seven consecutive weeks.

Evidence of supply concerns can be seen in the market structure where prices from the previous month are trading at a significant premium next month. Buyers scramble to secure supply.

“I think we’ve seen a record backwardation this summer and it’s going to be $ 150 a barrel,” Luckock said.

One positive news from the report was the second consecutive increase in inventories at the hub of Cushing, Oklahoma, the delivery point for US crude oil futures contracts, with inventories increasing by 1.2 million barrels.

Additional Report by Sonari Paul and Mohi Narayan Edited by Kirsten Donovan and Mark Potter

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