Oil Rallies as Ukraine Attacks Refineries, Ports in Russia
Oil prices extend their latest rally on Monday in the global commodity market following the latest attacks by Ukraine on refineries and ports in Russia.
Prices of Brent and U.S. West Texas Intermediate (WTI) increased following claims by Ukraine that recent drone attacks affected Russia’s two key oil hubs in the Baltic Sea.
Brent crude was trading at $65.72 per barrel. The US benchmark West Texas Intermediate (WTI) settle at $61.68. Recent reports suggest that the latest strikes temporarily suspended crude operations at Primorsk port, Russia’s largest oil-loading port, at the end of last week. Report highlighted that three pumping stations pushing crude to Ust-Luga were also targeted.
Chinese data released this morning shows refiners processed almost 15m b/d of crude oil in August, up 7.6% year-on-year, following robust imports and higher domestic production, according to ING.
In addition, apparent oil demand in the country rose to 14.53 million barrels per day last month, up 4.9% year on year amidst global uncertainties.
Meanwhile, the recent Baker Hughes data shows that oil drilling activity in the US expanded for a third week straight, as crude oil prices recovered amid growing geopolitical risks.
The number of active oil rigs in the US rose by two over the last week, leaving the total number of oil rigs at 416, the highest level seen since mid-July.
The latest positioning data shows that NYMEX WTI saw aggressive speculative selling, with managed money net longs declining by 14,630 lots to 12,657 lots in the week ending 9 September.
This is the least bullish position on record that speculators have held in WTI since June 2006. Similarly, speculators reduced their net long in ICE Brent by 41,476 lots to 209,578 lots over the reporting week.
The move largely follows OPEC+’s latest decision to boost its oil production, along with the IEA’s latest projection for a record oil surplus for the next year Oracle Soars Near $1trn over Multi-Billion Dollar Deal Disclosure
