Brent crude oil prices advanced on Tuesday adding to gains in the previous session after a drone attack on an oil pipeline pumping station in Russia reduced flows from Kazakhstan, but gains were capped on the prospects of supply rising soon.
Brent crude futures gained 15 cents, or 0.2 percent, to $75.37 per barrel.
US West Texas Intermediate crude futures were up 67 cents from Friday’s close at $71.41 a barrel. There was no settlement for WTI on Monday due to the US Presidents’ Day holiday.
“The overriding theme driving oil prices lately has been around supply expectations. With the weakness in prices over the past weeks, news of a drone strike on Kazakhstan’s export pipeline in Russia has provided the catalyst for some bearish sentiment to unwind,” IG market strategist Yeap Jun Rong said in an email.
The drone strike on the Kropotkinskaya station in Russia’s southern Krasnodar region reduced shipments from Kazakhstan to world markets by Western firms including Chevron and Exxon Mobil operator Caspian Pipeline Consortium said on Monday.
The Black Sea CPC Blend oil loading plan for February would remain unchanged, two sources familiar with the plan told Reuters.
“However, longer-term gains are likely to remain capped as the market may anticipate higher supplies from OPEC+ and Russia further down the road, while improvement in demand outlook particularly from China still remains uncertain, going by recent economic data,” IG’s Yeap said.
BMI analysts said in a note that they see Brent prices averaging $76 a barrel in 2025, down 5 percent from the 2024 average, because of market oversupply, tariffs and trade tensions.
OPEC+ producers are not considering delaying a series of monthly oil supply increases scheduled to begin in April, according to a Russian state media report.