Oil holds gain with Russian refining and OPEC+ curbs to the fore

Oil held a gain with continued Ukrainian drone attacks on Russian refineries and OPEC+ supply cuts in focus.

Brent crude traded near $87 a barrel after a 1.8% rally on Monday to the highest close since late October. West Texas Intermediate was below $83. About 600,000 barrels of Russia’s daily refining capacity has been knocked out by the strikes, according to Gunvor Group Ltd., while JP Morgan Chase and Co. put the figure at about 900,000 barrels.

Crude is on course for a third monthly climb after breaking free from a narrow range it had been trading in for much of the year. OPEC+ supply curbs have helped to bolster prices, and Iraq said this week it would cut oil exports in the coming months to compensate for not having delivered in full on its earlier pledges to reduce production.

Timespreads have risen in tandem with the latest gains in futures, with the gap between Brent’s two nearest contracts at 73 cents a barrel in backwardation. That’s a bullish pattern, with nearer contracts trading at a premium to later-dated ones. The figure was 49 cents a week ago. Volatility, however, continues to creep lower.