Oil prices extended gains on Tuesday after a drone attack on an oil pipeline pumping station in Russia curtailed flows from Kazakhstan, although prices remained under control due to the prospect of higher supply.
Brent crude futures rose 44 cents, or 0.6%, to $75.66 a barrel. U.S. West Texas Intermediate crude futures rose 91 cents from Friday’s close at $71.65 a barrel. WTI crude was not settled on Monday due to the U.S. Presidents Day holiday.
Yip John Runge, market strategist at IG, said: “The main topic driving oil prices lately has been around the supply outlook. With prices weakening over the past weeks, news of a drone strike on Russia’s Kazakhstan export pipeline has provided a catalyst for some bearish sentiment.”
A senior Russian official said on Tuesday Ukrainian drones had attacked a Russian pipeline pumping about 1 percent of global crude supply.
Russian oil carrier Transneft said the damage could reduce oil transport volumes from Kazakhstan by about 30% and take up to two months to deal with.
“However, long-term gains are likely to remain limited as the market may expect higher supplies from OPEC+ and Russia later while an improved demand outlook, especially from China, remains uncertain,” said Yip of IG.
BMI analysts said in a note that they expect Brent prices to average $76 per barrel in 2025, down 5% from the 2024 average, due to oversupply, tariffs and trade tensions. In December, OPEC postponed a plan to start increasing production to April, citing weak demand and rising supply outside the group.
OPEC+ supply plans for oil and demand uncertainty in China weigh on long-term prices
Despite short-term support from supply disruptions, long-term price gains appear limited. Analysts expect OPEC+ and Russia to increase output later in the year, which could limit the upside momentum. China’s economic recovery remains uncertain, adding to concerns about demand growth.
BMI analysts expect Brent crude prices to average $76 per barrel in 2025, down 5% from 2024, citing oversupply, tariffs and trade tensions. Moreover, OPEC+ is not considering delaying planned monthly supply increases that are scheduled to begin in April, according to a Russian state media report. This follows OPEC’s previous decision to postpone production increases until April due to weak demand and rising non-OPEC supply.
Geopolitical Uncertainty Could Fuel Market Volatility
Traders are also keeping an eye on possible developments in peace talks between Ukraine and Russia, as U.S. and Russian officials meet in Saudi Arabia. Any progress could affect Russian oil supplies and market sentiment.
Analyst Neil Crosby of Sparta Commodities noted that the market remains burdened by bearish factors, with the conflict in Ukraine being an unexpected factor. If Russian oil returns to the legitimate market, it could increase pressure on prices, although multiple scenarios remain possible.
Market outlook: Cautious optimism with resistance ahead
While crude oil has rebounded from key technical levels, further rally will depend on sustained momentum above $72.08. Short-term supply disruptions provide temporary support, but longer-term bearish factors — rising OPEC+ supplies, uncertain Chinese demand, and geopolitical risks — may limit gains.
Traders should keep an eye for confirmation of a bullish breakout above $73.65 or signs of weakness below $70.35, which could lead to sharper bearish moves towards $67.06.
Oil and gold prices rise amid geopolitical tensions
West Texas Intermediate light crude oil prices extended gains after Ukrainian drones attacked a pumping station of a major Russian pipeline, disrupting Kazakhstan’s crude exports; meanwhile, traders watched for U.S.-Russian peace talks.
Saudi Arabia, with the exception of Ukraine, while OPEC+ maintained planned supply increases, and concerns about a potential global trade war due to-for-tat tariffs imposed so far by President Donald Trump limit further gains.
It takes a rise above Friday’s high of $71.98 per barrel to reach the 55-day Simple Movement Average (SMA) at $72.25. Last week’s high can be seen at $73.64 and the 200-day simple moving average at $73.97.
There is still good support among the early to mid-February lows of $70.46 to $70.16.
The gold price resumed its rise
Spot gold is rising from Friday’s support level at a low of $2,877.00 an ounce, with recent highs remaining at $2,934.00 to $2,942.00 on the horizon.
February 12 lows are at $2,864.00 below the low of $2,877.00. While these lower levels are supported, the short-term uptrend remains bullish and targets last week’s all-time high of $2,942.00 as well as the psychological level of $3,000.00. A slide through the $2,864.00 low is likely to lead to the February 6 low of $2,834.00.
Aluminum futures prices rise
The price of aluminum futures next month is on track for gains for the third consecutive day with a 34-month high in February remaining at 262.20 on the horizon while supported by the highest level in January and last week’s low of 257.00 to 256.0.
