⏳ Final hours! Save up to 60% OFF InvestingProCLAIM SALE

Ukraine attacks on Russian infrastructure mixed for crude - Goldman

Published 03/26/2024, 10:30 AM
© Reuters
LCO
-
CL
-

Investing.com - As part of its war with Russia, Ukraine has since mid-March launched drone strikes targeting Russia’s energy infrastructure, attacks which have helped boost oil prices.

At 10:25 ET (14:25 GMT), the Nymex contract traded 0.1% lower at $81.89 a barrel, while the Brent contract dropped 0.2% to $85.88 a barrel. Both contracts are over 10% higher so far this year.

“We estimate that c.900 kb/d of refining capacity is offline now, and that the duration of outages might range from weeks to a permanent loss of capacity,” said analysts at Goldman Sachs, in a note dated March 25.

The influential investment bank estimated that a three-month 1 mb/d refining disruption would boost distillate (diesel, jet fuel) refining margins by $1-1.5/bbl as inventories decline, while a persistent outage would require a c.$2-3/bbl increase to raise the utilisation from other refiners.

The impact on crude is more mixed, Goldman analysts added, with a bearish effect from the decline in refinery demand and a bullish effect from the potential reduction in Russia oil exports.

The bank sticks with its view that crude will see a modest deficit in the first half of the year. 

“An easing in Russia refining or shipping frictions would be conceptually equivalent to a bearish SPR release, that deploys oil back into commercial inventories. This reinforces our view that crude prices have somewhat overshot fundamentals and are likely to consolidate in the short term,” the bank added.



Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.