Oil prices rose nearly 2% on Friday due to supply concerns following a Ukrainian drone attack on an oil depot in the port of Novorossiysk, a major export hub on Russia’s Black Sea coast.
Ukrainian drones damaged ships, residences, and an oil depot in the Russian city of Novorossiysk.
Brent crude futures rose $1.24, or 1.97%, to $64.25 a barrel by 03:15 GMT, while WTI Crude rose $1.25, or 2.13%, to $59.94 a barrel.
Both contracts posted small weekly gains as the oversupply outlook capped gains.
Ukrainian drone attacks on the port of Novorossiysk have sparked renewed fears of disruptions to oil supplies, as the port is Russia’s second-largest oil export hub and comes on the heels of a major attack on Tuapse nearly two weeks ago.
The roughly 2% increase in both contracts follows a nearly 3% drop in both Brent and WTI on Wednesday.
This decline is reflected in the OPEC report that global oil supply will easily meet demand in 2026, further departing from previous supply gap forecasts.
Brent gained 0.94% this week, while WTI gained 0.28%.
The U.S. Energy Information Administration (EIA) reported on Thursday that U.S. crude oil inventories rose more than expected last week, while gasoline and distillate stocks fell less than expected.
The EIA reported that crude oil inventories increased by 6.4 million barrels to 427.6 million barrels in the week ending November 7th, falling short of analysts’ expectations of a 1.96 million barrel increase.
Investors are also closely watching the impact of Western sanctions on Russian oil supplies and trade flows.
The US has imposed sanctions on Russian oil companies Lukoil and Rosneft as part of its efforts to persuade the Kremlin to engage in peace talks over Ukraine. The sanctions prohibit transactions with Russian companies after November 21st.
The slowdown in transactions caused by these US sanctions has added approximately 1.4 million barrels of Russian oil per day to tanker stocks, nearly one-third of the country’s seaborne export potential.
With the November 21st deadline for receiving oil supplied by sanctioned companies, unloading cargoes will become significantly more difficult.