Oil prices dip slightly amid fallout from attacks on Russian refineries
Oil prices have remained largely unchanged on Tuesday (26 March), following an increase the day before. Investors have different assessments of the impact of the loss of Russian oil refining capacity due to recent Ukrainian strikes. Meanwhile, a slight weakening of the US dollar provided some support to prices.
Source: Reuters
The price of Brent crude fell by 6 cents to US$86.69 per barrel, while WTI crude futures dropped by 4 cents to US$81.91 per barrel.
The previous day, Brent prices rose by 1.5%, and WTI by 1.6%, after the Russian government ordered companies to cut production in the second quarter to meet a target of 9 million barrels per day in accordance with commitments to the OPEC+ consumer group.
Russia, one of the world's top three oil producers and the largest exporter of oil products, is also grappling with the consequences of recent Ukrainian attacks on its oil refineries. Goldman Sachs analysts stated that these attacks have disrupted approximately 900,000 barrels per day of capacity, possibly temporarily, and in some cases, permanently.
Quote: "The impact of refining disruptions on crude prices is mixed, with a bearish effect from the decline in refinery demand and a bullish effect from the potential reduction in Russia oil exports," the analysts said in a note.
Background:
- After a Ukrainian drone attack on 23 March, the Russian oil extraction company Rosneft halted a 70,000 barrels-per-day unit at its Kuibyshev Refinery in Samara.
- The consequences of these attacks and production cuts in Russia remain unclear, however, a slight weakening of the US dollar from the previous session supported oil prices.
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