Crude oil prices edged up slightly on Wednesday as supply disruptions in Russia and the U.S. supported the market. However, gains were capped by ongoing U.S.-Russia peace talks, which could potentially lead to increased global oil supply if sanctions on Russia are lifted.
At 9:56 AM on Wednesday, Brent crude oil April futures were at $75.87, up 0.04%, while WTI April crude oil futures were trading at $71.86, also up 0.04%.
On the Multi Commodity Exchange (MCX), February crude oil futures rose 0.37% to ₹6,256, while March futures gained 0.26% to ₹6,263.
Key Supply Disruptions Supporting Oil Prices
Russia: Caspian Pipeline Consortium (CPC) Attack
A drone attack on PS Kropotkinskaya, a key crude oil transportation facility under Caspian Pipeline Consortium (CPC), disrupted supplies.
The CPC announced that repairs will take 1.5 to 2 months, potentially reducing Kazakh oil throughput by 30%.
The CPC pipeline, which transported 63 million tonnes of crude in 2024, is crucial for global energy security.
U.S. and Western companies own 74% of CPC shipments, with Chevron alone contributing 26.8 million tonnes last year.
U.S.: Cold Weather Cuts Production
Severe winter conditions in North Dakota have disrupted oil output.
The North Dakota Pipeline Authority estimates that production in the state has fallen by 150,000 barrels per day, impacting overall U.S. supply.
Potential Peace Talks and Their Impact on Oil Markets
While supply concerns provided support, oil price gains remained limited as the U.S. and Russia held talks in Riyadh to end the Ukraine war.
Market Concerns: Ukraine’s absence in the negotiations has raised doubts about reaching a swift resolution.
Possible Sanctions Relief on Russia: A peace deal could lead to the lifting of sanctions on Russian oil, increasing global crude supply and putting downward pressure on prices.
Natural Gas Futures Climb
March natural gas futures on MCX were trading at ₹344.10, up 1.53%, compared to the previous close of ₹338.90.
Market Outlook
With ongoing supply concerns in Russia and the U.S., crude oil prices may remain volatile. However, geopolitical developments, including potential sanctions relief on Russia, could shift market dynamics in the coming weeks.
