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At 10:56 GMT, Light Crude Oil Futures are trading $71.98, up $1.27 or +1.80%.
Kazakhstan Supply Disruption Offers Temporary Price Support
Brent crude prices also advanced on Tuesday, extending gains from the previous session following a drone attack on an oil pipeline pumping station in Russia. The incident disrupted oil flows from Kazakhstan, momentarily tightening supply.
According to IG market strategist Yeap Jun Rong, oil prices have been largely driven by supply expectations. The recent weakness in crude was partially offset by the Kazakhstan pipeline disruption, leading traders to unwind bearish bets.
A senior Russian official confirmed that Ukrainian drones targeted a pipeline carrying about 1% of the world’s crude supply. While the attack has raised concerns over short-term supply disruptions, sources indicate that the Black Sea CPC Blend oil loading plan for February remains unchanged.
OPEC+ Supply Plans and China’s Demand Uncertainty Weigh on Long-Term Prices
Despite the short-term support from supply disruptions, longer-term price gains appear capped. Analysts expect additional barrels from OPEC+ and Russia later in the year, which could limit upside momentum. China’s economic recovery remains uncertain, adding to concerns about demand growth.
BMI analysts predict Brent crude prices will average $76 per barrel in 2025, a 5% decline from 2024, citing oversupply, tariffs, and trade tensions. Furthermore, OPEC+ is not considering delaying its planned monthly supply increases set to begin in April, according to a Russian state media report. This follows OPEC’s earlier decision to postpone output hikes until April due to weak demand and rising non-OPEC supply.
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