Oil Steady As Focus Stays On U.S./Russia Talks, Drone Strike Damage

Meanwhile, Saudi crude exports drop in September in line with OPEC cuts: File Image/Pixabay

As of 1638 GMT on Tuesday, oil trading was playing out as a repeat of the previous session, with prices holding steady as expectations of a possible Russia/Ukraine peace deal weighed against damage on a key conduit for Kazakhstan's oil exports due to a drone attack.

Brent rose 61 cents to $75.83 per barrel, while West Texas Intermediate climbed $1.10 to $71.84 per barrel.

The seven drones that attacked the Kropotkinskaya station on the Caspian Pipeline Consortium pipeline in Russia's Krasnodar region could result in exports being cut by 30 percent for up to two months, pipeline operator Transneft said.

A cut of 30 percent could amount to as much as 380,000 barrels per day (bpd).

Countering this and keeping oil prices in check was U.S. and Russian delegates (but not Ukraine) holding a 4-1/2-hour meeting in Saudi Arabia to discuss ways to halt what has been called the deadliest conflict in Europe since World War II.

Robert Yawger, analyst at Mizuho, said, "Everyone is waiting on what is going to happen with Russia and Ukraine; that's not something that's going to happen in the next 15 minutes, so the market is going to stay cautious."

Meanwhile, the Group of Seven was reportedly mulling over tightening the oil price cap on Russian petroleum in an effort to raise costs of the war and "incentivize it to negotiate a meaningful peace."

The G-7 is also considering "troops and resources on the ground, coupled with robust international oversight to monitor agreed-upon lines."

In other oil news on Tuesday, the latest data from the Joint Organizations Data Initiative (JODI) revealed that Saudi Arabia's crude exports fell in December by 60,000 bpd from the seven-month high in November; crude production also fell slightly, by some 20,000 bpd from November to 8.9 million bpd.

These numbers are in line with the kingdom's pledge to the Organization of the Petroleum Exporting Countries (OPEC) to keep the cartel's production capped at about 9 million bpd, with the Saudis assuming the largest volume of the OPEC cuts.