Oil Increases in Volatile Trade

Brent crude futures were higher at $3.13, or 2.7%, at $118.61 a barrel at 1100 GMT. Prices had earlier dropped to a low of $114.45.

U.S. West Texas Intermediate (WTI) crude futures climbed $2.69, or 2.5%, to $111.96. The contract had earlier dropped to a low of $108.38.

The market remains on edge over the possibility of further sanctions on Russia, the world’s second-largest crude exporter after it invades Ukraine, actions that Moscow contacts a “special operation.”

U.S. President Joe Biden is assigned to announce more Russian sanctions when he encounters European leaders on Thursday in Brussels, covering an emergency meeting of NATO.

European Union member countries stay split on whether to ban imports of Russian crude and oil products which resume flowing; however, this might change once short-term contracts run out.

According to SEB analyst Bjarne Schieldrop, next up are Russian exports in April. There we see revoked cargoes and problems for Russia to find buyers. India and China will buy, but that won’t be sufficient to avoid declining Russian exports.

Russia on Tuesday warned of a decline in oil exports via the Caspian Pipeline Consortium (CPC) of up to 1 million barrels per day (BPD), or 1% of global oil production, because of storm-damaged berths.

Exports Halted

As stated by a port ship agent, CPC exports halted entirely on Wednesday, and repairs will require at least one and a half months.

Falling crude stockpiles in the United States, the world’s largest oil consumer, also added to the apprehension around supply.

As stated by market sources, the belated data from the American Petroleum Institute industry group established that U.S. crude stocks declined by 4.3 million barrels for March 18. [API/S]

On average, nine analysts surveyed by Reuters had estimated crude inventories increased by 100,000 barrels in the week to March 18.

Official U.S. inventory data should come from the Energy Information Administration on Wednesday.