(Bloomberg) — Oil edged higher after a three-day drop on signs of a tightening market driven by sanctions, geopolitical risks, and OPEC+ supply cuts.
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Brent crude rose toward $86 a barrel after retreating by more than 2% in the final three days of last week, while West Texas Intermediate was below $81. Indian oil refiners, Russia’s largest customers after China since the 2022 invasion of Ukraine, will no longer accept tankers owned by state-run Sovcomflot PJSC due to sanctions risks, hampering flows.
Continued drone strikes by Ukraine are also crimping Russia’s crude-refining capabilities. In addition, a terrorist attack in Moscow over the weekend left more than 130 people dead. The assault was claimed by Islamic State, although President Vladimir Putin hinted at Ukrainian involvement.
Crude is headed for a third monthly gain as OPEC+ presses on with output curbs. While China’s shaky demand outlook has been a headwind, Premier Li Qiang said Beijing was stepping up policy support to spur growth, and that systemic risks were being addressed. Reflecting the bullish mood, money managers’ net-long positions on Brent have risen to the highest in more than a year.
Iranian-backed Houthis, meanwhile, fired a missile at Chinese-owned oil tanker Huang Pu on Saturday, US Central Command said, highlighting continued risks to shipping in the seas off Yemen. The assault came even after the militant group previously said they wouldn’t attack vessels from China.
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