Oil Prices Inch Higher on Caspian Supply Disruption and Cold Weather in the U.S.

Crude oil prices rose today following a drone attack on the Caspian Pipeline Consortium and cold weather in the United States, both disruptive to production.

At the time of writing, Brent crude was trading at $75.90 per barrel, with West Texas Intermediate at $71.91 per barrel.

A statement by the Russian government said that flows along the Caspian Pipeline Consortium infrastructure had dropped by between 30% and 40% on Tuesday following the terrorist attack that involved seven unmanned aerial vehicles, per a statement by the CPC. Reuters said the attack was carried out by Ukrainian forces.

In U.S. news, North Dakota’s Pipeline Authority has warned the state’s crude oil and gas production rate could suffer a decline of between 120,000 bpd and 150,000 bpd because of frigid weather. North Dakota is the third-largest oil-producing state in the country.

Additional fuel for oil prices came from Riyadh, where top Russian and U.S. diplomats met to discuss bilateral ties and their restoration, causing anxiety in Europe about the possibility of a deal on the Ukraine war that would not reckon with European Union desires and preferences.

Counterpressure on prices came from statements from U.S. officials suggesting that sanctions on Russia could be lifted soon, which would make exports much easier, boosting global oil availability. The deal is not done, however, and the U.S. and Russia will meet again before there is clarity on any issue discussed.

Further counterpressure came with the news that oil exports from Iraq’s Kurdistan region could be restarted as soon as next month, after a prolonged pause amid disputes between Iraq and Turkey, to where the oil flows, and between the central government in Baghdad and the Kurdistan autonomous government on the issue of oil revenue sharing. Like the U.S.-Russia deal on Ukraine, the restart is not certain.

By Irina Slav for Oilprice.com

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