Oil prices climb as mkt weighs Ukraine war escalation

FE Team | Published: November 20, 2024 22:11:24

LONDON, Nov 20 (Reuters): Oil edged higher on Wednesday as concerns about escalating hostilities in the Ukraine war potentially disrupting oil supply from Russia outweighed data showing rising US crude stocks.
Brent crude futures for January were up 49 cents, or 0.7 per cent, to $73.80 a barrel at 1313 GMT. US West Texas Intermediate crude futures for December , due to expire on Wednesday, were up 71 cents, or 1 per cent, to $70.10, while the more active WTI contract for January was up 56 cents, or 0.8 per cent, at $69.80.
The escalating war between major oil producer Russia and Ukraine has kept a floor under the market this week.
"We may expect (Brent) oil prices to stay supported above the $70 level for now, as market participants continue to monitor the geopolitical developments," said Yeap Jun Rong, market strategist at IG.
On Tuesday, Ukraine used US ATACMS missiles to strike Russian territory for the first time, Moscow said, while Russian President Vladimir Putin lowered the bar for a possible nuclear attack.
"The price action in the oil market has been relatively uneventful post-U.S. election, with some pick-up in the past couple of days due to a temporary production outage in the North Sea and a further escalation in the nature of the confrontation in Ukraine," said Harry Tchilinguirian, head of research at Onyx Capital Group.
Norway's Equinor on Wednesday said it restored full output capacity at the Johan Sverdrup oilfield in the North Sea following a power outage. Equinor last month said the field was producing at peak capacity of around 755,000 barrels of oil equivalent per day (boed).
On the demand side, US crude oil stocks rose by 4.75 million barrels in the week ended Nov. 15, market sources said on Tuesday, citing American Petroleum Institute figures.
That was a bigger build than the 100,000-barrel increase analysts polled by Reuters were expecting.
Gasoline inventories, however, fell by 2.48 million barrels, compared with analysts' expectations for a 900,000-barrel increase. Distillate stocks also fell, shedding 688,000 barrels last week, the sources said.