Oil prices edged up on Wednesday, buoyed by concern over oil supply disruptions in Russia and the US while the market awaits clarity on sanctions as the US attempts to broker a deal to end the war in Ukraine.
Brent crude futures were up 64 cents, or 0.8%, at $76.48 a barrel by 1339 GMT, on track for a third day of gains.
US West Texas Intermediate crude futures for March rose 75 cents, or 1%, to $72.60, up 2.6% from the previous close before Monday's US public holiday.
The March contract expires on Thursday and the more active April contract gained 70 cents, or 1%, to $72.53.
"The market is trying to make up its mind on three bullish drivers: Russia, Iran and OPEC," said BNP Paribas commodities strategist Aldo Spanjer. "People are trying to figure out the impact of announced and actual sanctions."
Questions also remain over whether sanctions on Russia could be phased out after talks between the US and Russia in Riyadh, but it may be too early for that, Spanjer said, Reuters reported.
Meanwhile, drone attacks on Russian oil infrastructure are reducing supplies.
Russia said that Caspian Pipeline Consortium (CPC) oil flows, a major route for crude exports from Kazakhstan, were reduced by 30-40% on Tuesday after a Ukrainian drone attack on a pumping station. A 30% cut would equate to the loss of 380,000 barrels per day (bpd) of market supply, Reuters calculations show.
In the US, cold weather has threatened oil supply, with the North Dakota Pipeline Authority estimating that production in the state would be down by as much as 150,000 bpd.
"The psychologically important $70 level (for oil prices) appears to have held firm, aided by the Ukrainian drone attack on the Russian oil pumping station and fears that cold weather in the US may curtail supply," said IG market analyst Tony Sycamore.
"On top of that there is some speculation that OPEC+ may decide to delay its planned supply increase in April," he added, referring to the Organization of the Petroleum Exporting Countries and allies. BNP's Spanjer expects the cartel to extend its output cuts.
However likely or not a US-brokered peace deal between Russia and Ukraine may be, analysts at Goldman Sachs said that any associated easing in sanctions against Russia is unlikely to bring a significant increase in oil flows.
"We believe that Russian crude oil production is constrained by its OPEC+ 9 million barrels per day production target rather than current sanctions, which are affecting the destination but not the volume of oil exports," they said in a report.
Israel and Hamas will also begin indirect negotiations on a second stage of the Gaza ceasefire deal, officials said on Tuesday. A ceasefire could lead to easing oil prices as the risk of conflict-driven supply disruption reduces.
Various tariffs being announced by the Trump administration could also weigh on oil prices by raising the cost of consumer goods, weakening the global economy and reducing demand for fuel. Trump said on Tuesday that he intended to impose auto tariffs "in the neighbourhood of 25%" and similar duties on semiconductors and pharmaceutical imports.
