KEY POINTS
- Oil prices steadied as Ukraine struck the Druzhba pipeline but supplies continued uninterrupted.
- Peace talks between Washington and Moscow yielded no progress, easing expectations that Russian oil might soon return to global markets.
- Rising US inventories and a cautionary outlook from Fitch added to concerns about an oversupplied market.
Oil prices steadied on Thursday, with traders weighing Ukraine’s latest strike on Russian energy infrastructure against the reality that diplomatic efforts to halt the war appear to have run aground.
The market had been bracing for signs that the attack might interrupt the flow of oil through the Druzhba pipeline, but operators insisted shipments were unaffected.
Brent crude inched up to 62.91 dollars by mid-morning in London, while West Texas Intermediate edged towards 59.28 dollars. Volumes were relatively thin, although sentiment was shaped more by geopolitics than by day-to-day market movements.
Ukraine’s strikes deepen concerns over Russian refining capacity
Kyiv’s forces hit the Druzhba line in Russia’s Tambov region, the fifth strike on the route that supplies Hungary and Slovakia. Despite the disruption, both the operator and Hungary’s MOL reassured clients that oilcontinued to flow. Behind the headlines, analysts say the broader campaign is beginning to bite.
Kpler, a consultancy tracking global refinery performance, noted that Ukraine’s drone operations have moved from sporadic raids to a more organised push against Russian refining capacity. It estimates that refinery throughput has slipped to roughly 5 million barrels a day since early autumn, down more than 300,000 barrels a day from a year earlier, with petrol output taking the worst hit.
Traders had earlier assumed that any progress in peace negotiations could usher Russian oil back into a market already wrestling with excess supply.
Those expectations were tempered this week after President Donald Trump’s envoys left talks with the Kremlin without any sign of movement. Trump himself said he was no clearer on what might follow, cooling hopes of a near-term breakthrough.
In Washington, fresh data on inventories added another layer to the market’s caution. US crude stocks rose by 574,000 barrels last week, bucking forecasts for a modest draw, as refiners increased activity ahead of the year end. Gasoline and distillate inventories also rose, suggesting demand remains uneven.
Fitch added a sober note of its own, trimming its oil price assumptions for the coming three years. The agency expects supply growth to outpace demand, keeping the market comfortably supplied even if geopolitical risks flare up.
