West Texas Intermediate (WTI) crude climbed on Friday, with prices trading near $59.50 up 1.60% intraday after touching a session high of $60.47. The recovery comes after a Ukrainian drone strike damaged an oil depot at Russia’s Black Sea port of Novorossiysk, one of the country’s most critical export hubs. Regional authorities cited by Reuters said debris from the attack hit a trans-shipment facility and several coastal structures, immediately raising concerns over potential supply disruptions.
Oil prices are also drawing support from looming United States (US) sanctions targeting Russian crude flows, set to take effect on November 21. Lukoil, one of Russia’s largest private producers, has reportedly begun reducing staff across its global trading divisions an early sign that market participants are bracing for diminished operational flexibility once sanctions tighten.
Analysts caution that a significant share of Russia’s seaborne crude exports could become stranded, especially as India and China have recently halted their Russian oil purchases, restricting Moscow’s ability to reroute shipments.
However, the geopolitical lift contrasts sharply with mounting bearish fundamentals. The International Energy Agency (IEA) projects a surplus of over 2.4 million barrels per day in 2025 and more than 4 million in 2026, even as global demand continues to expand. These forecasts mirror expectations from OPEC+, which has been raising output since April and anticipates another mild surplus next year.
In the United States, the Energy Information Administration (EIA) reported a significantly larger-than-expected build in crude inventories this week, adding to concerns about an already oversupplied market. Rising stockpiles come as US production hovers near record levels, reinforcing structural downward pressure on prices.
Against this backdrop, WTI’s rebound is driven primarily by geopolitical risk, though the recovery remains limited by fundamentals that still point to persistent softness. Traders will now monitor developments surrounding US sanctions, Russia’s export capacity, and upcoming monthly reports from the IEA and OPEC+ to determine whether the latest bounce in oil prices is sustainable.
