Brent oil futures are trading near $US64 per barrel amid growing uncertainty surrounding a potential ceasefire between Ukraine and Russia, according to Commonwealth Bank analyst Vivek Dhar. Renewed fighting over the weekend and the rejection of parts of a US-backed peace deal by Russian President Vladimir Putin have contributed to market volatility. Ukraine has reportedly targeted two Rosneft refineries, while Russia has attacked Ukrainian energy infrastructure, causing widespread power outages.
Attacks on Russian oil infrastructure by Ukraine have intensified since August, with at least 14 refinery strikes recorded in November alone. Dhar noted that these attacks highlight the potential consequences for oil markets should a ceasefire be established, particularly regarding the normalisation of Russian oil and refined product flows. The Commonwealth Bank provides various financial services, including retail, business, and institutional banking, as well as wealth management. It aims to provide financial solutions to individuals and businesses.
US sanctions imposed on Rosneft and Lukoil, which took effect on November 21, have reportedly disrupted Russian exports. However, refined product shipments have risen above 2 million barrels per day in November, driven primarily by diesel and gasoil. Crude exports from Russia have also increased, reaching 3.5 million barrels per day in the four weeks leading up to November 30, marking the first increase in six weeks.
Dhar also noted that floating storage has been a significant factor in recent increases in global stockpiles, while land-based inventories remain close to the five-year average. He anticipates that Brent futures will continue to trade within the $US60 to $US65 per barrel range. He cautioned that oversupply concerns could arise if Russian oil flows circumvent sanctions, potentially driving prices down toward $US60 per barrel through 2026. Brent crude last traded at $US63.71 per barrel.
