Oil prices experienced an increase as a crucial pipeline connecting Kazakh oil fields to Russia’s Black Sea coast suspended loadings. This disruption occurred after one of its three moorings sustained damage amidst Ukrainian attacks in the region over the weekend. West Texas Intermediate crude rose by 1.3 per cent, settling above $US59 on Monday, while traders are closely monitoring potential US military operations in Venezuela.
The Caspian Pipeline Consortium (CPC) is responsible for transporting the majority of Kazakhstan’s crude exports, averaging 1.6 million barrels daily this year. CPC reported that further operations at the affected mooring are currently impossible due to the extensive damage sustained following the explosion. The specific cause of the damage is under investigation.
Ukraine has not issued any comments regarding the incident. However, it did confirm separate attacks targeting an oil refinery and tankers over the weekend. These actions reflect an escalation in strikes against Russian oil targets amid the ongoing conflict. The infrastructure attacks coincide with expectations of significant oversupply in the global oil market.
According to data from Bridgeton Research Group, trend-following commodity trading advisers held a 90 per cent short position on Monday. The heavily bearish sentiment among algorithmic traders leaves the market vulnerable to more pronounced price spikes in response to bullish developments, given the trend-following nature of these traders.
