Oil prices climb on Friday, marking their best weekly performance since early January. The market responded to ongoing supply disruptions, despite a larger-than-expected increase in U.S. crude inventories.
Brent crude futures held firm at $76.45 per barrel, while West Texas Intermediate (WTI) crude futures stayed at $72.28 per barrel. Both benchmarks recorded nearly a 2.5% rise for the week. This surge was driven by multiple supply risks, including disruptions in Kazakh oil flows and uncertainty surrounding OPEC+ production plans.
A significant reduction in Kazakh oil exports contributed to the price rally. The Caspian Pipeline Consortium (CPC), a major transport route for Kazakh crude, cut its flows by 30-40% due to damage at Russia’s Kropotkinskaya pumping station caused by a Ukrainian drone attack.
Additionally, Russia intensified its strikes on Ukraine’s energy infrastructure, targeting gas production facilities in Kharkiv. These attacks aimed to weaken Ukraine’s energy capabilities, adding further instability to global oil supply chains.
Extreme cold conditions in North Dakota further exacerbated supply issues. The North Dakota Pipeline Authority reported a significant decline in production, with output dropping by 120,000 to 150,000 barrels per day. Natural gas production was also affected, tightening supply in an already volatile market.
OPEC+ members and their allies are reportedly considering delaying a planned production increase. This hesitation stems from ongoing geopolitical risks and fluctuating demand signals. While potential restarts of oil flows from Iraq’s Kurdistan region could alleviate some supply concerns, market participants remain cautious.
The U.S. Energy Information Administration (EIA) released data showing a 4.6 million barrel increase in crude inventories for the week ending February 14. This exceeded market expectations of a 3.1 million barrel rise, indicating potential demand weakness.
Despite this increase in crude stocks, gasoline and distillate inventories declined, suggesting steady consumption. Gasoline stocks fell by 151,000 barrels, while distillate stocks dropped by 2.1 million barrels. These reductions provided some support to oil prices, balancing the market outlook.
Oil prices remain supported by global supply risks, severe weather disruptions, and geopolitical instability. While U.S. crude inventories increased beyond forecasts, steady fuel consumption helped maintain price strength. Investors will closely monitor OPEC+ decisions and geopolitical developments in the coming weeks.
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Oil prices climb as supply disruptions & rising U.S. crude inventories impact the market. Stay updated with the latest trends in oil trading.
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