Oil prices moved lower on Monday, giving back part of last week’s strong rally after crude shipments restarted at Russia’s Novorossiysk port, reducing near-term fears of supply disruption.
As of 04:35 ET (09:35 GMT), January Brent futures slipped 0.7% to $63.97 a barrel, while West Texas Intermediate (WTI) crude fell 0.7% to $59.52 per barrel.
Russian exports restart
Both benchmarks had jumped more than 2% on Friday after Ukraine carried out a high-visibility strike on Novorossiysk and a nearby terminal operated by the Caspian Pipeline Consortium, inflicting damage and temporarily halting flows equal to about 2% of global oil supply.
By Sunday, however, media reports indicated that tanker-tracking data showed vessels once again loading crude at the port.
Although the return of exports has eased short-term supply worries, market sentiment remains cautious. Ukraine said over the weekend that its forces struck Russia’s Ryazan refinery on Saturday and the Novokuibyshevsk refinery in the Samara region on Sunday, renewing concerns about future disruptions.
Traders weigh broader risks
Investors are also watching developments around tightening U.S. sanctions. Washington has introduced measures that ban companies from transacting with Russian oil majors Lukoil and Rosneft after Nov. 21, prompting buyers to unwind deals and raising uncertainty over how much crude could ultimately be stranded.
“While the oil market is expected to remain in a large surplus through 2026, it is also facing growing supply risks. The scale and intensity of Ukrainian drone attacks on Russian energy infrastructure are picking up,” ING analysts said in a note.
“Risks are also emerging elsewhere, with Iran seizing an oil tanker in the Gulf of Oman after it passed through the Strait of Hormuz. The Strait is a key choke point for the global oil market, with around 20m b/d passing through it,” they added.
Speculators boost Brent net longs
Positioning data shows that speculative investors increased their net long positions in ICE Brent by 12,636 lots last week, bringing the total to 164,867 lots as of Tuesday.
“This was predominantly driven by short covering. It suggests that some participants are reluctant to be short at the moment amid supply risks related to uncertainty over sanctions,” ING added.