MW Oil prices lifted after drone attack on Russian pipeline

By William Watts

Oil futures were lifted Tuesday, finding support after a drone attack by Ukraine on a pipeline carrying crude from Kazakhstan across southern Russia curtailed flows.

Price moves

-- West Texas Intermediate crude CL.1 CLH25 for March delivery rose 81 cents, or 1.1%, to $71.55 a barrel on the New York Mercantile Exchange. WTI futures didn't close Monday due to the Presidents Day holiday in the U.S.

-- April Brent crude BRN00 BRNJ25, the global benchmark, was up 34 cents, or 0.5%, to $75.56 a barrel on ICE Futures Europe.

-- Back on Nymex, March gasoline RBH25 rose 0.4% to $2.099 a gallon, while March heating oil HOH25 was little changed at $2.462 a gallon.

-- March natural gas NGH25 dropped 3.3% to $3.603 per million British thermal units.

Market drivers

Drones packed with explosives on Monday hit a pumping station for a pipeline that carries Kazakh crude across southern Russia for export via the Black Sea, news reports said. It could take up to two months to fix the damage, which could cut the volume of oil pumped from Kazakhstan by 30%, Transneft, Russia's state-controlled pipeline company, said in a Tuesday statement, according to AFP.

The attack "raised concerns about a decrease in supplies on global markets, providing support to prices," Hassan Fawaz, founder and chairman of GivTrade, said in a note.

The market's focus, however, is largely on whether the Organization of the Petroleum Exporting Countries and its allies, including Russia, follow through on plans to boost output beginning in April, he said.

Bloomberg on Monday reported that OPEC+ was considering pushing back the hikes, despite pressure from President Trump.

However, the market's focus remains on the expected increase in output from OPEC+ and Russia, set to begin in April, which will likely limit substantial upside in prices in the near term. The market could find support if the organization postpones the production increases.

Later Monday, Russian Deputy Prime Minister Alexander Novak denied that OPEC+ was considering a delay, Reuters reported, citing state media.

-William Watts

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February 18, 2025 07:15 ET (12:15 GMT)

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