Market Highlights and Key Data 1. The December delivery light crude oil futures price on the New York Mercantile Exchange fell by 18 cents to settle at $59.91 per barrel, a decline of 0.3%. The January delivery Brent crude futures price in London dropped by 19 cents to $64.20 per barrel, also down 0.3%. The SC crude oil main contract rose 0.24%, closing at 462 yuan per barrel.
2. Ukraine’s General Staff claimed responsibility for an attack on the Novokuibyshevsk refinery owned by Rosneft in Russia’s Samara region, marking the latest in a series of strikes targeting Russia’s fuel production sector.
3. Serbian President Aleksandar Vučić stated on October 16 that the government is willing to repurchase Gazprom’s controlling stake in Serbia’s sole refinery company, Naftna Industrija Srbije (NIS), at a premium to help the firm overcome U.S. sanctions.
4. Iraq’s Prime Minister assured Lukoil’s former CEO that Iraq remains committed to stabilizing global oil markets, with the Russian company’s West Qurna-2 field continuing to produce approximately 480,000 barrels per day.
5. Analysis by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) suggests that sanctions on Rosneft and Lukoil could have long-term negative effects on Russia’s oil sales. These measures are already reducing Russia’s oil revenues, driving crude prices to multi-year lows.
Investment Logic Recent reports indicate that loading operations at Russia’s Novorossiysk Sheskharis oil terminal have resumed following last week’s attack. However, satellite imagery shows disruptions in Urals crude loadings, with two berths still not fully operational. The loading speed, particularly for Urals crude, remains below normal levels as repair work continues after Friday’s drone strike.
Berth 1 sustained damage, while infrastructure near Berth 4 was also affected. Berth 1A, which had been docked for repairs, is now back in operation, while Berth 2 is loading at reduced rates—likely due to damage near Berth 4, as the adjacent pipeline also supplies Berths 1–3. The Sheskharis terminal has nine berths: Berths 4 and 5 handle fuel supply and bunkering; Berths 1, 1A, and 2 are dedicated to crude oil; others can load crude but primarily handle refined products (Berths 3, 6, 7, and 8). The port previously exported around 500,000 barrels per day of Russian crude.
Strategy Oil prices are expected to remain volatile in the short term, with a medium-term bearish outlook (shorting calendar spreads, Brent, or WTI).
Risks Downside Risks: U.S. easing sanctions on Russian oil, macroeconomic black swan events. Upside Risks: Tightened supply from sanctioned producers (Russia, Iran, Venezuela), large-scale disruptions due to Middle East conflicts.
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