Oil prices rose slightly on Wednesday due to concerns about potential disruptions in oil supply from the U.S. and Russia, while markets await updates on the ongoing peace talks related to Ukraine.
Brent crude futures increased by 14 cents, or 0.2%, reaching $75.98 a barrel at 0450 GMT, marking a potential third consecutive day of gains. Meanwhile, U.S. West Texas Intermediate (WTI) crude for March delivery rose by 16 cents, or 0.2%, to $72.01, up by 1.8% from Friday’s close. The March WTI contract is set to expire on Thursday, with the more actively traded April contract also rising by 14 cents, or 0.2%, to $71.97.
Tony Sycamore, an analyst at IG Markets, noted that the $70 per barrel price point has remained resilient, supported by a Ukrainian drone strike on a Russian oil pumping station and fears that cold weather in the U.S. could affect oil supply.
Additionally, there is speculation that the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and its allies, may delay its planned production increase set for April.
On Tuesday, Russia confirmed that oil flows through the Caspian Pipeline Consortium (CPC)—a key route for crude exports from Kazakhstan—had been reduced by 30-40% due to a Ukrainian drone attack on a pumping station. A 30% reduction equates to a loss of about 380,000 barrels per day.
In the U.S., cold weather is threatening to disrupt oil production, with the North Dakota Pipeline Authority estimating that production in the state could decrease by up to 150,000 barrels per day.
Meanwhile, U.S. President Donald Trump’s administration has agreed to continue talks with Russia regarding the ongoing war in Ukraine, which could potentially ease sanctions on Russian oil exports. However, analysts at Goldman Sachs believe that a potential peace agreement and sanctions relief will not significantly impact Russian oil flows, as production constraints are more related to the OPEC+ production targets rather than sanctions.
In addition to geopolitical developments, Trump announced plans to impose tariffs of around 25% on automobiles, as well as duties on semiconductors and pharmaceuticals, which could impact consumer product prices and, in turn, fuel demand.
