Crude oil prices were on course to close a second week of gains in a row despite declines earlier in the week on persistent worry about oversupply, despite the continued drone attacks of Ukrainian forces on Russian refineries.
At the time of writing, Brent crude was trading at $67.40 per barrel, with West Texas Intermediate changing hands for $63.49 per barrel. Both were down from Thursday’s close but slightly higher on Monday.
Crude should have received some support from the Federal Reserve’s decision to cut interest rates by 25 basis points, but since the decision was expected, it had probably lost its power over oil prices even before it was announced.
What’s more, the U.S. Department of Energy reported a larger-than-expected build in middle distillate stocks, which apparently sparked doubts about the strength of demand in the world’s biggest consumer of oil products. Interestingly, the fact that distillate stocks have been trending consistently lower than seasonal averages for much of this year remains overlooked.
Meanwhile, Ukrainian forces attacked two more Russian refineries, but this failed to move the needle on international oil prices because the attacks coincided with comments by President Donald Trump that he would rather have cheap oil than more sanctions on Russia. “President Trump’s comment that he preferred low prices over sanctions on Russia also eased concerns over supply disruptions,” ANZ commodity analyst Daniel Hynes said earlier today in a note, as quoted by Reuters.
A statement by Transneft earlier this week, denying a report that the refinery attacks could lead to production curtailment may have also helped keep a lid on crude prices. The pipeline operator said there were no curtailment plans, adding that the report, by Reuters, sought to cause reputational damage and that the goal was to “destabilize the situation within the context of the information war the West is waging” on Russia.
By Irina Slav for Oilprice.com
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