WTI at $60 After Attack on Russian Oil Hub


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures settled up more than 2% Friday (11/14) 
after a Ukrainian drone strike on Russia's main Black Sea port of Novorossiysk 
raised the geopolitical risk in oil.

   The NYMEX WTI contract for December delivery rose $1.40, or 2.4%, to settle 
at $60.09 bbl. ICE Brent for January delivery advanced $1.34, or 2.1%, to 
$64.36 bbl.

   For the week though, WTI rose just 0.6% while Brent climbed 1.1%, after 
accounting for Wednesday's (11/12) tumble of 4% in both.

   Among refined products, December RBOB gasoline futures settled up $0.0519 at 
$2.01116 gallon. Front-month ULSD futures advanced $0.0664 to $2.5311 gallon.

   The U.S. Dollar Index rose 0.13 points to 99.31 against a basket of foreign 
currencies.

   Oil prices rose on supply concerns after reports that the Ukraine strike 
damaged two oil berths, pipeline infrastructure and pumping units at the 
Sheskharis oil transshipment complex.

   Russia's state pipeline monopoly Transneft suspended supplies into the port, 
halting the loading of crude and oil products from the hub, which exports over 
760,000 bpd of Russian crude.

   Critical supply of Kazakh oil, amounting to some 1.5 million bpd, which also 
uses the port complex, was quickly resumed after a brief suspension, limiting 
the overall supply shock.

   Looming U.S. sanctions targeting Russian producers Rosneft and Lukoil are 
also compounding supply risks, with the wind-down period for trading 
relationships set to expire on November 21.

   The Russian geopolitical risk counters to an extent a string of bearish 
reports on oil released this week by the Organization of the Petroleum 
Exporting Countries (OPEC), the International Energy Agency (IEA) and the U.S. 
Energy Information Administration (EIA).

   The IEA raised its forecast for next year's global oil surplus to 4.09 
million bpd, even higher than the 3.97 million bpd it estimated in October.

   OPEC estimated that crude supplies were probably already in a surplus of 
500,000 bpd for the third quarter -- versus its estimate a month ago that they 
were in a 400,000-bpd deficit.

   The EIA hiked its forecast for U.S. crude oil production by 206,000 bpd in 
its latest weekly report -- an increase of 1.5% that brings output to 13.862 
million bpd.

    




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