LONDON: Oil prices were largely steady on Tuesday near four-month highs after breaking above range-bound trading last week, but the prospect of rising exports from Russia weighed amid Ukrainian attacks on refineries.
The Brent crude oil futures contract for May delivery was down 15 cents to $86.74 a barrel at 0946 GMT, while U.S. West Texas Intermediate (WTI) prices were down 9 cents to $82.07.
The WTI April contract, with expires on Wednesday, was down 9 cents to $82.63.
Both benchmarks hit highs last seen in November in the previous session, buoyed by lower crude exports from Saudi Arabia and Iraq, and signs of stronger demand and economic growth in China and the United States.
“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.
Russian oil exports from its western ports revised up 10% in March amid refinery outage
“Brent will likely trade in a $80-90 per barrel range this year, with an end-June forecast of $86 per barrel.”
In Russia, exports are rising after Ukrainian drone attacks on the country’s oil infrastructure, pressuring prices.
“Attacks will likely reduce Russian crude runs by up to 300,000 barrels per day, in addition to scheduled maintenance closures”, JP Morgan analysts wrote in a note.
“Lower primary runs, however, would lead to higher crude oil exports”, they added.
Russia will increase oil exports through its western ports in March by almost 200,000 barrels per day (bpd) against a monthly plan for 2.15 million bpd.
Prices were also weighed down by uncertainty about how U.S. interest rates would pan out ahead of this week’s Federal Reserve policy meeting.
“The market may be in consolidation mode awaiting signals on rate cuts from this week’s FOMC meeting,” said DBS Bank energy sector team lead Suvro Sarkar in an email.
“Oil prices are already up quite a bit over the last two weeks, factoring in higher geopolitical risk premium after the attacks on Russian refineries”.
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