Singapore Oil Market Update: Mixed Views on Russian Refinery Capacity
In the world of oil trading, things are heating up. After a recent surge, oil prices remained relatively stable on Tuesday. Investors seem to be torn on the impact of recent attacks on Russian refinery capacity by Ukraine. However, a slight dip in the US dollar is providing some support to the market, as reported by Reuters.
Price Movements
Brent crude futures for May saw a modest increase of 7 cents, reaching $86.82 per barrel. Meanwhile, US West Texas Intermediate crude futures also rose by 6 cents to hit $82.01 a barrel at 8:41 a.m. Saudi time.
In Monday’s trading session, Brent rose by 1.5 percent, while WTI climbed by 1.6 percent. These gains came after Russia announced production cuts to meet OPEC+ targets due to recent attacks on its refineries by Ukraine.
Impact of Refinery Disruptions
Goldman Sachs analysts estimate that Ukraine’s attacks have taken about 900,000 barrels per day of refining capacity offline in Russia. The effects are uncertain, but the market is feeling a mixture of bearish and bullish pressures on crude prices.
Despite the uncertainties, a weaker US dollar is offering some relief to oil prices. A weaker dollar makes oil purchases in other currencies more affordable, potentially boosting overall demand.
Analyst Tina Teng suggests that the US dollar could continue to weaken as the Federal Reserve is expected to cut rates later in the year, providing a bullish factor for oil prices.
Geopolitical Factors
The ongoing Israel-Gaza conflict is adding to the geopolitical premiums in the oil market. While the impact on Middle East supplies is unclear, the lack of a ceasefire between Israel and Hamas is keeping prices supported.
According to senior market analyst Kelvin Wong at OANDA, the geopolitical risk premium is a key factor supporting oil prices at this juncture.