Caspian oil pipeline closure heightens supply concerns, U.S. oil soars more than 5%

On Wednesday (March 23), oil futures rose 5.
3%, settling at $121.
6 per barrel
.
Oil prices rose as data from the EIA Inventory Report showed a decline in U.
S
.
crude inventories and increased supply risks due to storm damage to a key export terminal in the Black Sea.

Commercial crude excluding strategic reserves imported 6.
486 million b/d last week, up 91,000 b/d
from the previous week, according to the EIA inventory report.
The four-week average supply of U.
S.
crude products was 20.
954 million b/d, up 11.
7%
from a year earlier.
U.
S.
crude exports rose 908,000 b/d last week to 3.
844 million b/d, the highest
since the week of July 9, 2021.

Many analysts have repeatedly warned that inventories in the Cushing region of the United States will tighten
in the coming months due to limited growth in crude oil production and strong refining and export demand.
And now, as a number of Wall Street's crude bullish banks have warned, the conflict in Ukraine clearly poses greater risks
to supply.

According to TASS news, the Caspian Oil Pipeline (CPC) terminal stopped crude oil loading, and crude oil to the facility continued to be exported; Output will be paused
on Thursday.
Russian Deputy Prime Minister Alexander Novak said oil supplies from the Caspian Oil Pipeline (CPC) could be completely halted for up to two months
.
Damage to the Caspian oil pipeline could severely impact the global oil market
.
The CPC pipeline is an important supply line for the global market, transporting about 1.
2 million barrels of Kazakhstan crude oil per day, accounting for 1.
2% of
global demand.

EU and NATO leaders will gather in Brussels on Thursday to strengthen the response
to Russia's invasion of Ukraine.
White House national security adviser Jake Sullivan said the United States and its allies would impose further sanctions on Moscow, announcing a deal
as early as Friday.
A person familiar with the matter revealed that the agreement is to ensure that the United States supplies gas and hydrogen
to Europe.

Andrew Lipow, president of Lipow Oil Associates, said there is a growing consensus that the ban on Russian oil purchases has in fact caused supply disruptions of 2-3 million b/d and that oil prices will continue to move higher until demand is destroyed until alternative supplies are figured
out.

Ed Moya, senior market analyst at Oanda, said the energy market is looking at the short- and medium-term situation and the outlook is bleak
.
You see the likelihood of large volatility rise, and the recent high of WTI $130 may not be too difficult to break.