By Anna Hirtenstein
LONDON (Reuters) -Oil prices climbed about 1% on Friday, boosted by supply fears after a Ukrainian drone attack hit an oil depot in a major Russian export hub, the Black Sea port of Novorossiysk.
Brent crude futures rose 66 cents, or 1.05%, to $63.67 a barrel by 0900 GMT, while U.S. West Texas Intermediate crude advanced 70 cents, or 1.19%, to $59.39 a barrel.
Both contracts jumped more than 2% in early Asia trading but then pared some gains.
Friday’s attack damaged a ship in port, apartment blocks and an oil depot in Novorossiysk, injuring three crew of the vessel, Russian officials said. The port halted oil exports, two industry sources told Reuters.
“The intensity of these attacks has increased, it’s much more often. Eventually they could hit something that causes lasting disruption,” said Giovanni Staunovo, commodity analyst at UBS. The market is trying to assess the impact of the latest attacks and what this means for Russian supply, he said.
Industry sources say crude oil shipments via Novorossiysk reached 3.22 million tonnes, or 761,000 barrels a day, in October, with a total of 1.794 million tonnes of oil products exported.
The price increases came after both Brent and WTI fell about 3% on Wednesday, weighed down by an OPEC report that global oil supply would match demand in 2026, in a further shift from its earlier projections of a supply deficit. The benchmarks are on track to decline on the week, with Brent down 1% so far, while WTI has lost 0.6%.
On Thursday, the U.S. Energy Information Administration reported a larger-than-expected rise in U.S. crude stocks last week, while gasoline and distillate inventories fell less than expected. [EIA/S]
Crude inventories rose by 6.4 million barrels to 427.6 million barrels in the week that ended on November 7, the EIA said, versus Reuters poll expectations for a gain of 1.96 million barrels.
Investors are also watching the impact of Western sanctions on Russian oil supply and trade flows.
The U.S. imposed sanctions banning deals with Russian oil companies Lukoil and Rosneft after November 21, as part of efforts to bring the Kremlin to peace talks over Ukraine.
About 1.4 million barrels per day of Russia’s oil, or almost a third of seaborne export potential, has been added to stocks held on tankers as unloading slows due to U.S. sanctions against Rosneft and Lukoil, JPMorgan said on Thursday.
Unloading cargoes could become much more challenging after the November 21 cut-off to receive oil supplied by the companies, the bank added.
(Reporting by Anna Hirtenstein in London. Additional reporting by Sam Li in Beijing and Siyi Liu in Singapore; Editing by Clarence Fernandez, Elaine Hardcastle)
