Russian oil refineries face renewed Ukrainian strikes

A pause of about two weeks in Ukraine’s attacks on Russian oil refineries has ended. The Guardian reported on Sunday that Ukraine had resumed the strikes, defying pressure from US President Donald Trump ahead of the US midterm elections.

Over three consecutive nights beginning on 30 October, Ukrainian drones reportedly hit three Russian refineries. According to the source, the facilities targeted were Rosneft’s Novokuybyshevsk refinery in Samara, the Bashneft-Novoil plant in Ufa and LUKOIL’s NORSI refinery in Kstovo.

WTI Oil: Key Questions Answered

WTI Oil: Definition and Characteristics

West Texas Intermediate, abbreviated to WTI, is a crude oil grade traded internationally. Alongside Brent and Dubai Crude, it is one of three major types. Its relatively low gravity earns it the description “light”, while its low sulphur content makes it “sweet”. Regarded as a high-quality oil, WTI is easy to refine. Production comes from the United States, with distribution through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, and its price regularly features in media coverage.

WTI Oil Prices: Main Drivers

Supply and demand determine WTI Oil prices, as they do for other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. On the supply side, political instability, wars and sanctions can cause disruption and affect prices. Decisions by OPEC, a group of major oil-producing countries, also play a central role. Currency movements matter too: oil is traded mainly in US Dollars, so a weaker US Dollar can make WTI Crude Oil more affordable, while a stronger dollar can make it less affordable.

Weekly Inventories: Impact on WTI Oil Prices

WTI Oil prices respond to the weekly inventory figures released by the American Petroleum Institute (API) and the Energy Information Agency (EIA). Inventory movements capture shifts in supply and demand. A decline in stocks can signal stronger demand and lift oil prices; a build can point to greater supply and weigh on prices. The API releases its report every Tuesday, followed by the EIA the next day. The two sets of figures are generally close, differing by no more than 1% on 75% of occasions. As the EIA is a government agency, its figures are regarded as more reliable.

12 OPEC Nations: Influence on WTI Oil Prices

At meetings held twice a year, the 12 oil-producing nations in OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently affect WTI Oil prices. Lower quotas can constrain supply and lift oil prices, whereas increased OPEC production has the reverse effect. The broader OPEC+ grouping adds ten non-OPEC members, with Russia the most notable.

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