Oil prices are trading firmer this morning, with Brent up more than 1.1% at the time of writing, following additional attacks on Russian energy infrastructure over the weekend. The Caspian Pipeline Consortium (CPC) had to suspend loadings at its terminals after one of the moorings was damaged by Ukrainian attacks. The CPC terminal is located at Novorossiysk port in Russia, predominantly shipping Kazakhstan crude oil. It’s been on the receiving end of several attacks recently. The latest incident saw Kazakhstan activate a plan to redirect exports. Shipments from the CPC terminal have averaged around 1.48m b/d so far this year, up roughly 200k b/d from last year, as the expansion of the Tengiz field in Kazakhstan supported exports.
Adding support to the market is increasing supply risks for Venezuelan crude oil after President Trump said he’s considering closing the airspace over the nation. This escalation between the US and Venezuela has the US carrying out strikes on boats it claims are carrying drugs, while also building its military presence nearby. Venezuela exports around 800k b/d, of which most of the crude oil will head to China. Clearly, any further escalation puts this supply at risk.
OPEC+ met over the weekend. The group stuck to its policy of keeping output steady over the first quarter of next year “due to seasonality”. This was largely expected. Meanwhile, the group will review the maximum sustainable production capacity of members, which will serve as a reference for 2027 production baselines. This could certainly lead to disagreement among members, with countries keen to secure higher baselines.
The latest positioning data shows that speculators cut their net long in ICE Brent by 57,430 lots over the last reporting week to 120,934 lots. The move was predominantly driven by fresh shorts entering the market, with the gross short growing by 39,404 lots week-on-week. Speculators also cut their net long in ICE gasoil for the first time since late October, reducing positions by 20,043 lots to a net long of 82,152 lots. Speculative selling in both crude and gasoil is likely driven by Russia-Ukraine peace plan talks.