By Yuka Obayashi and Sam Li
TOKYO/BEIJING (Reuters) -Oil prices fell on Monday, erasing last week’s gains, as loadings resumed at the key Russian export hub of Novorossiysk after a two-day suspension at the Black Sea port that had been hit by a Ukrainian attack.
Brent crude futures dropped 53 cents, or 0.82%, to $63.86 a barrel at 0423 GMT. U.S. West Texas Intermediate (WTI) crude futures were trading at $59.53 a barrel, down 56 cents, or 0.93% from Friday’s close.
Both benchmarks rose more than 2% on Friday to end the week with a modest gain after exports were suspended at Novorossiysk and a neighbouring Caspian Pipeline Consortium terminal, affecting the equivalent of 2% of global supply.
Novorossiysk port resumed oil loadings on Sunday, according to two industry sources and LSEG data. However, Ukraine’s stepped-up attacks on Russia’s oil infrastructure remain in focus for further possible disruptions.
Ukraine’s military said on Saturday it hit Russia’s Ryazan oil refinery, and Kyiv’s General Staff said on Sunday it struck the Novokuibyshevsk oil refinery in Russia’s Samara region.
“Investors are trying to gauge how Ukraine’s attacks will affect Russia’s crude exports in the long term, while also locking in profits after last Friday’s rally,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“Overall, the perception of oversupply from OPEC+ production increases remains,” he said, adding that WTI is likely to stay near $60 a barrel, fluctuating within a $5 range.
Investors are also monitoring the impact of Western sanctions on Russian supply and trade flows. The United States imposed sanctions banning deals with Russian oil companies Lukoil and Rosneft after November 21 to push Moscow toward peace talks over Ukraine.
U.S. President Donald Trump said on Sunday that Republicans are working on legislation that will impose sanctions on any country doing business with Russia, and he said Iran may get added to that list.
Earlier this month, OPEC+ agreed to increase December output targets by 137,000 barrels per day, the same as for October and November. It also agreed to a pause in increases in the first quarter of next year.
ING said in a report that the oil market was expected to remain in a large surplus through 2026. But it warned of rising supply risks as Ukraine stepped up drone attacks on Russian energy facilities and Iran seized a tanker in the Gulf of Oman after it transited the Strait of Hormuz, a key route for about 20 million barrels a day of global oil flows.
The latest positioning data showed speculators increased their net long positions in ICE Brent by 12,636 lots over the last reporting week to 164,867 lots as of last Tuesday.
ING said this was predominantly driven by short-covering and it suggested some participants were reluctant to be short at the moment amid supply risks related to uncertainty over sanctions.
The number of rigs drilling for oil in the United States rose by three to 417 in the week to November 14, data from oil services firm Baker Hughes showed on Friday.
(Reporting by Yuka Obayashi in Tokyo and Sam Li in Beijing; Editing by Sonali Paul and Jamie Freed)
