Russian oil refineries targeted as Ukraine renews strikes

Russian oil refineries have again come under Ukrainian attack after a pause of about two weeks, the Guardian reported on Sunday. Ukraine resumed the strikes despite pressure from US President Donald Trump ahead of the US midterm elections.

Over three successive nights beginning on October 30, 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

What Defines WTI Oil?

Among the crude oil varieties traded internationally, WTI, short for West Texas Intermediate, is one of three major types alongside Brent and Dubai Crude. Its relatively low gravity and sulphur content give it the descriptions “light” and “sweet”, respectively. Regarded as a high-quality oil, WTI is easy to refine. Sourced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, with its price regularly cited in media coverage.

Which Factors Shape WTI Oil Prices?

Supply and demand underpin WTI oil prices, as they do for all assets. Stronger global growth can lift demand, while weaker global growth can have the reverse effect. Supply disruptions arising from political instability, wars and sanctions can also affect prices. Another major influence is OPEC, a group of leading oil-producing countries whose decisions help shape prices. As oil is traded mainly in US Dollars, the value of the US Dollar also affects WTI crude oil prices: a weaker US Dollar can make oil more affordable, while a stronger US Dollar can have the opposite effect.

How Do Inventory Figures Affect WTI Oil Prices?

WTI oil prices respond to weekly oil inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA), as stock changes reflect shifts in supply and demand. A decline in inventories can signal stronger demand and push prices higher. Conversely, a build-up in stocks 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 tend to be close, differing by no more than 1% on 75% of occasions. As the EIA is a government agency, its data is regarded as more reliable.

Why Do OPEC Decisions Matter for 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. Cutting quotas can restrict supply and lift oil prices, whereas raising production has the reverse effect. The broader OPEC+ group brings together OPEC and ten additional non-OPEC members, with Russia the most notable among them.

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