Crude oil prices were trading higher today, on course for another week of gains despite headwinds from the world of geopolitics and another weekly inventory build estimated for the United States.
Brent crude was trading at $76.27 per barrel at the time of writing and West Texas Intermediate was changing hands for $72.27 a barrel after the Energy Information Administration reported a build in crude oil stocks for the second week of February, with drawdowns in fuels as refinery maintenance season begins.
In geopolitics, prices were pressured by U.S.-Russian negotiations after the two sides indicated the talks have been productive and a peace deal may well be on the way—along with sanction relief for Russia, which most observers see as bearish for prices as it would facilitate more exports.
That would be in line with President Trump’s campaign promise for lower prices at the pump but at odds with Russia’s priorities as a member of the OPEC+ group. On the other hand, the talks, per Reuters, “enraged” the Ukraine’s president, which appears to have put some oil traders in tqo minds about the prospect of peace.
“Expectations for a potential peace deal between Russia and Ukraine, which could ease sanctions on Moscow, have faded somewhat due to Ukraine’s hardened stance, prompting some investors to buy back into the market,” Fujitomi Securities analyst Toshitaka Tazawa told the publication.
“Prices will likely remain rangebound, continuing to move with headlines,” Royal Bank of Canada analysts said in a note cited by Bloomberg. They added that “as more time passes without the market realizing a substantial catalyst,” traders will be drawn to bet on average prices in that range.
An additional driver for prices this week came from the Ukraine, which attacked a compressor station for the Caspian Pipeline Consortium, disrupting flows of Kazakh oil to global markets. According to official Russian sources, the flow of oil along the CPC pipeline had dropped by between 30% and 40% on Tuesday, following the attack.
By Irina Slav for Oilprice.com