Oil Extends Gain as Investors Track Russia Tensions, Supply Risk

(Bloomberg) — Oil extended the biggest gain in a week, as US President Donald Trump ramped up his rhetoric against Russia and traders watched for supply disruptions from the OPEC+ member.

Brent rose toward $68 a barrel after gaining 1.6% on Tuesday, while West Texas Intermediate was near $64. Trump said he thought NATO nations should shoot down Russian aircraft that violated their airspace and struck a more sympathetic tone on Ukraine’s chances of winning the war. He also reiterated that the US was ready to impose strong tariffs on Moscow, but said measures would be effective only if European countries stopped buying Russian oil.

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Meanwhile, Russia mulled restrictions on diesel exports for some companies following a spate of attacks by Ukrainian drones on its energy infrastructure, including pipeline facilities. The nation’s supply has been in focus amid global efforts to pressure Moscow into negotiating an end to the conflict.

Oil’s little changed this month as traders weigh a bearish fundamental outlook against long-running geopolitical tensions. On the supply front, Iraq is finalizing a deal to restart crude exports from its Kurdistan region following a two-year halt. That move could bring about 230,000 barrels-a-day back to the international market, exacerbating a looming glut.

In the US, an industry report showed crude inventories fell 3.8 million barrels last week, although holdings of distillates increased. Official data is due later on Wednesday.

Some market metrics point to strengthening, with Brent’s prompt spread — the difference between its two closest contracts — at 66 cents a barrel in backwardation, double the level two weeks ago. Meanwhile, the difference between two closest December contracts widened to $1.48 a barrel from less than $1 a fortnight ago.

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