KEY POINTS
- Oil prices stay steady amid Ukraine peace talks and supply disruptions.
- Kazakhstan’s oil exports drop 30 percent due to pipeline attacks.
- Traders await OPEC+ decision on production increases in April.
Oil prices remained steady on Tuesday as the United States and Russia continued negotiations to end the war in Ukraine.
The lack of agreement between parties has not stopped diplomatic discussions from potentially reducing worldwide political tensions with economic effects on global energy markets.
At the same time, oil traders are closely monitoring supply disruptions caused by a Ukrainian drone attack on a Russian oil pipeline, which has affected the Caspian Pipeline Consortium (CPC).
According to Reuters, the attack caused Kazakhstan’s oil transit to drop by 30 percent leading to the removal of nearly 380,000 barrels per day from global supplies.
The crude oil market showed small growth as Brent futures gained by 4 cents to reach $75.26 per barrel, while U.S. West Texas Intermediate (WTI) crude surged by 48 cents to reach $71.22 per barrel, catching up with Monday’s gains.
Analysts predict that market oil price movements in the coming weeks will stem from supply disruptions and discussions.
Impact of supply disruptions and OPEC+ plans
Analysts are determining the extent of supply shortage from CPC pipeline damage and its resulting consequences on international oil price trends.
Prices have risen since the disruptions began although market stability depends entirely on the length of time required to normalize complete business operations.
“The market is closely watching the duration and scale of supply cuts,” UBS analyst Giovanni Staunovo said. “If the pipeline outage continues, we could see more price swings.”
Additionally, investors are waiting for OPEC+ to confirm its production plans for April.
OPEC+ previously signaled its potential for increased output but analysts now predict the group will postpone such action because oil prices have decreased.
Market outlook and future considerations
The upcoming market attention revolves around U.S. crude inventory statistics and refinery maintenance programs that can shape near-term oil consumption.
An intensive inventory reduction could strengthen oil prices yet ongoing refinery maintenance operations might decrease upcoming crude consumption levels.
“There is plenty of crude available, but with refinery turnarounds ramping up in March, demand may temporarily weaken,” United ICAP Energy Specialist Scott Shelton noted.
The oil market anticipates the evolution of Ukraine peace talks and supply market disruptions.
Market prices will experience substantial changes over the next weeks based on significant geopolitical transformations or production modification decisions.
