Oil prices fell on Thursday despite news of supply disruptions in European imports of Russian crude. Contamination concerns shutdown the Druzhba pipeline that can ship up to 1 million barrels per day. The issues will most likely be temporary, but it did boost Brent prices above the $75 price level. West Texas Intermediate was stable as the news of Russian disruptions become more widespread, but as the narrative in the background has focused on what the OPEC can do to offset the supply issues, prices are dropping.
The OPEC has partnered with major producers to stabilize prices by limiting production in an effort to soak excess supply. Geopolitical issues such as the US sanctions against Venezuela and Iran as well as the military actions in Libya have also affected the amount of crude in the market. The OPEC+ and geopolitical disruptions have been the two main factors acting against a rising US production keeping prices higher, but as the June deadline for the production cut agreement nears an extension is not a slam dunk.
The US will continue to pressure Saudi Arabia to lift its production to cover the supply gap and Russia has not signalled a total commitment to an extension. The June OPEC and major producer ministerial meeting will be the pivotal moment for the energy sector this year.