On Tuesday, Brent crude oil prices continued their upward trend initiated during the previous session following a drone attack on an oil pumping station in Russia. This incident served as a catalyst for price increases, although expectations of a near-term supply boost have capped significant growth.

Key Factors Driving Price Increases

1. Drone Attack on Russian Infrastructure. The recent drone strike on the "Kropotkinskaya" station in Russia’s Krasnodar region had notable consequences for global oil supply chains. Specifically:

- Kazakhstan’s oil exports were disrupted.

- Western companies, including Chevron $CVX and Exxon Mobil $XOM, had to temporarily cut shipments to global markets.

2. Rise in Futures Prices. According to trading data, futures prices for crude oil have reacted as follows:

- Brent crude futures rose by 15 cents, or 0.2%, to $75.37 per barrel.  

- U.S. West Texas Intermediate (WTI) crude futures increased by 67 cents to $71.41 per barrel. 

3. Impact of U.S. Public Holiday on Trading. The observation of Presidents' Day in the United States influenced Monday's trading activity:

- WTI trading was paused on Monday due to the federal holiday.  

- Tuesday's trading saw heightened volatility as markets reopened, catching up with global developments.

Expert Commentary

According to IG market strategist Jun Rong Yeap, supply expectations remain the main driver of oil prices. The drone attack targeting Kazakhstan's export pipeline eased bearish sentiment in the market, providing temporary price stabilization.

“Recent declines in oil prices and news of the drone strike have been significant market movers, serving as a catalyst for more optimistic sentiment among traders,” noted Jun Rong Yeap.

Conclusion

The drone attack on Russia’s oil transportation infrastructure and its resulting disruptions to global supply have played a pivotal role in the recent uptick in oil prices. While the attack caused a brief spike, analysts remain cautiously optimistic about further price growth. The anticipated expansion of supply, coupled with the restoration of existing routes and export volumes, remains a fundamental factor to watch. The situation demands close monitoring, as similar incidents could have prolonged effects on market stability and pricing dynamics.