Oil Ekes Out Gains As Analysts Predict Further Support From Russia Sanctions

But projected growth in both supply and demand worry traders anyway: File Image/Pixabay

Following the previous session's disastrous oil trading losses of over 4 percent, investors on Thursday regained some upward equilibrium due to the familiar concern that the latest sanctions against Russia would cause supply disruption.

However, bearish sentiment revolving around oversupply worries remained undented.

Brent on Thursday settled up 30 cents to $63.01 per barrel, while West Texas Intermediate settled up 20 cents to $58.69 per barrel.

Suvro Sarkar, energy sector team lead at DBS Bank, said, "There should be considerable support to oil prices around $60/bbl, especially given there could be short-term disruption to Russian export flows once stricter sanctions kick in."

For the record, and according to JPMorgan, the sanctions have caused nearly a third of Russia's seaborne oil export potential stuck in tankers: about 1.4 million barrels per day (bpd), amid re-routing and slowed unloading, a situation exacerbated by India and China, both of whom have suspended purchases of Russian crude.

On the bearish side of the ledger, sources citing American Petroleum Institute numbers said  that U.S. crude stockpiles rose by 1.3 million barrels in the week ending November 7, and this compelled Giovanni Staunovo, analyst at UBS, to remark, "We have seen a build in oil inventories across key on-shore locations across Europe, Singapore, Fujairah and the United States based on preliminary data last week."

Offsetting the API data to a degree were declines in gasoline and fuel inventories, by 0.9 million barrels and 0.6 million barrel last week, respectively.

This was compounded by the International Energy Agency, which in its monthly report released Thursday raised its forecasts for global oil supply and demand for this year and 2026 - which could result in even larger surpluses for both years.