Oil climbs more than 2% after Ukrainian attack damages Russian oil depot

Oil prices rose more than 2% on Friday after a Ukrainian drone attack damaged an oil depot in the Russian Black Sea port of Novorossiysk.

Brent crude futures rose $1.34, or 2.13%, to $64.35 a barrel by 0227 GMT, while U.S. West Texas Intermediate crude rose $1.40, or 2.39%, to $60.09 a barrel.

The operational headquarters of Krasnodar region, writing on Telegram, said drone fragments hit three apartments and an oil depot in a trans-shipment complex as well as coastal structures.

Both benchmarks had held steady on Thursday as worries about looming sanctions on Russian oil countered concerns about global oversupply that had pushed the contracts down more than $2 a barrel in the previous session. [O/R]

The U.S. imposed sanctions on Russian oil companies Lukoil and Rosneft as part of efforts to bring the Kremlin to peace talks over Ukraine. The sanctions prohibit transactions with the Russian companies after November 21.

Around 1.4 million barrels per day of Russian oil, or almost a third of the country’s seaborne exporting potential, is being added to oil being held in tankers as unloading slows due to U.S. sanctions against Rosneft and Lukoil, JPMorgan said on Thursday. The bank also said after the cut-off date of November 21 for receiving oil supplied by the sanctioned companies, unloading cargoes could become significantly more challenging. Brent and WTI futures fell more than $2 a barrel on Wednesday after the Organization of the Petroleum Exporting Countries said global oil supplies would slightly exceed demand in 2026, a shift from an earlier projection for a deficit.

After Wednesday’s plunge released pent‑up bearish sentiment, markets stabilised to reassess the crude outlook, Haitong Securities said in a report.

The U.S. Energy Information Administration on Thursday 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 ended on November 7, the EIA said, compared with expectations in a Reuters poll for a gain of 1.96 million barrels.