Despite possible Avengers strikes on Nigerian oil pipelines and Druzbha Pipeline contamination, oil prices are trading steady to lower today. WTI crude is currently trading at $65.78, down a few cents from yesterday’s close.
Fuel prices, on the other hand, are trading slightly higher this afternoon. Diesel prices are currently $2.1024, up 0.4 cents. Gasoline prices are trading at $2.1448, up 1.6 cents.
European crude markets and global fuel prices are getting a lift this morning as several European countries have suspended deliveries of Russian crude among contamination concerns. The issue relates to the Druzbha pipeline, which transports roughly 700 kbpd into Poland, Germany, and the Czech Republic. Refineries in those countries have been forced to significantly curtail production rates, straining local (and global) supplies. The news briefly lifted Brent crude prices above $75/bbl for the first time since October 2018.
In OPEC news, Nigeria has indicated its support for a 6-month extension to current production cuts, claiming shorter extensions are cumbersome to manage. The country earlier this week experienced a pipeline fire which led a local oil company to declare force majeure on 150 kbpd of transport, roughly 8% of the country’s output. The oil company suspects an “illegitimate third-party” might have caused the outage. Nigeria has seen significant militant activity over the past few years from the Niger Delta Avengers, leading some to wonder if Avengers are responsible for the outage.
In Iran news, their foreign minister has been postulating on what Endgame the US seeks from recent sanctions. Foreign Minister Zarif indicated he does not believe Trump seeks war, but suspected that he may be goaded into a conflict by his advisors. He added that despite recent comments, Iran does not currently plan to shut down the Strait of Hormuz, a key oil chokepoint that facilitates almost 20% of all maritime crude flows.