By Ahmad Ghaddar

LONDON (Reuters) -Oil was broadly stable on Wednesday as concerns about escalating hostilities in the Ukraine war potentially disrupting oil supply from Russia offset data showing rising stocks.

futures for January were up 22 cents, or 0.3%, to $73.53 a barrel at 1026 GMT. U.S. West Texas Intermediate crude futures for December, due to expire on Wednesday, were up 31 cents, or 0.5%, to $69.70, while the more active WTI contract for January was up 24 cents at $69.48.

The escalating war between major oil producer Russia and Ukraine has kept a floor under the market this week.

“We may expect (Brent) oil prices to stay supported above the $70 level for now, as market participants continue to monitor the geopolitical developments,” said Yeap Jun Rong, market strategist at IG.

On Tuesday, Ukraine used U.S. ATACMS missiles to strike Russian territory for the first time, Moscow said, while Russian President Vladimir Putin lowered the bar for a possible nuclear attack.

“The price action in the oil market has been relatively uneventful post-U.S. election, with some pick-up in the past couple of days due to a temporary production outage in the North Sea and a further escalation in the nature of the confrontation in Ukraine,” said Harry Tchilinguirian, head of research at Onyx Capital Group.

Norway’s Equinor on Wednesday said it restored full output capacity at the Johan Sverdrup oilfield in the North Sea following a power outage. Equinor last month said the field was producing at peak capacity of around 755,000 barrels of oil equivalent per day (boed).

On the demand side, U.S. crude oil stocks rose by 4.75 million barrels in the week ended Nov. 15, market sources said on Tuesday, citing American Petroleum Institute figures.

That was a bigger build than the 100,000-barrel increase analysts polled by Reuters were expecting.

Gasoline inventories, however, fell by 2.48 million barrels, compared with analysts’ expectations for a 900,000-barrel increase.

Distillate stocks also fell, shedding 688,000 barrels last week, the sources said.

Official government data is due later on Wednesday.

“If we get a confirmation of the API’s preliminary crude stock build figure, the market is likely to retrace lower to the levels seen at the start of the week,” Onyx Capital’s Tchilinguirian said.

Investing.com– Gold prices rose on Wednesday, gaining more ground as safe haven demand was buoyed by heightened tensions over Russia and Ukraine, although resilience in the dollar limited overall gains.

The yellow metal rebounded sharply from two-month lows this week, taking some relief from mild weakness in the dollar. But the greenback steadied from recent losses on Wednesday, limiting gold’s gains. 

rose 0.2% to $2,636.28 an ounce, while expiring in December rose 0.3% to $2,639.50 an ounce by 23:35 ET (04:35 GMT). 

Russia-Ukraine war in focus after Moscow’s nuclear threat 

Increased tensions between Russia and Ukraine were the biggest point of support for gold, as safe haven demand increased after Moscow lowered the threshold for nuclear retaliation over Ukrainian attacks. 

The move was in response to the U.S. reportedly authorizing the use of long-range missiles by Ukraine against Russia, which Moscow warned could mark a dire escalation in the conflict. 

Still, Russian Foreign Minister Sergei Lavrov said the country would do all it could to avoid nuclear war. But hostilities with Ukraine persisted, as both countries launched debilitating attacks against each other over the past week. 

Dollar steadies, limits gold upside 

But strength in the limited gold’s recovery this week, especially as the greenback steadied from three days of losses on Wednesday. The dollar also remained close to a one-year high hit last week. 

Markets remained uncertain over just what a Donald Trump presidency will entail for the U.S. economy and interest rates, amid some doubts over whether the Federal Reserve will cut rates in December.

Traders were seen pricing in a 61% chance for a 25 basis point cut, and a 39% chance rates will remain unchanged, showed. 

Gold had plummeted from record highs after Trump’s election victory earlier in November, although this trade now appeared to be cooling.

Other precious metals also stalled on Wednesday after some gains this week. steadied at $979.25 an ounce, while were flat at $31.260 an ounce. 

Among industrial metals, benchmark on the London Metal Exchange rose 0.3% to $9,150.50 a ton, while December rose 0.1% to $4.1713 a pound.

Copper was also nursing steep losses in recent weeks, especially as recent stimulus measures from top importer China underwhelmed. 

Markets took middling cues from China keeping its benchmark unchanged on Wednesday. 

Investing.com — Oil prices settled sharply higher Monday, underpinned by output disruptions at the Johan Sverdrup oilfield in Norway and increased intense fighting between Russia and Ukraine.

By 2.30 p.m. ET (1930 GMT), the futures traded 3.2% higher to settle at $69.16 a barrel and the contract climbed 3.2% to $73.30 a barrel. 

Output disruption in Norway boost oil prices

Norway’s state-controlled Equinor said it had halted crude production at the Johan Sverdrup oil field following an onshore power outpage.

Disruptions to output at Johan Sverdrup — Europe’s highest producing oil field, is for about a quarter of all oil production in the North Sea — comes at a time many are worried about a supply surplus next year amid plans from OPEC and non-OPEC to step up output.

“Persistent worries over the clouded demand outlook in China and ample global supply outlook for next year continue to restrict any major price gains,” said analysts at ING, in a note.

The benchmark contracts slid more than 3% last week on weak data from China and after the International Energy Agency forecast global oil supply will easily exceed demand in 2025 even if cuts remain in place from a group of top producers.

EIA data has shown that US oil production remains near record levels, but the market is now executing more following the announcement that Chris Wright, CEO of Liberty Energy, would be appointed as the next Secretary of Energy.   

President-elect Donald Trump’s selection of Wright is seen as a strong signal of the incoming administration’s focus on ramping up domestic fossil fuel production. 

Ukraine to strike deep into Russia?

President Joe Biden’s administration has allowed Ukraine to use US-made weapons to strike deep into Russia, according to reports Sunday, in response to Russia’s deployment of North Korean ground troops to supplement its own forces.

This decision to let Ukraine strike deep into Russia with long-range US missiles escalates the conflict in Ukraine and could lead to World War Three, senior Russian lawmakers said on Sunday.

There has been little impact on Russian oil exports from the war so far, but if Ukraine were to target more oil infrastructure that could see oil markets add more of a geopolitical bid.

Latest positioning data

The latest positioning data showed that a fair amount of speculative selling in the benchmark contracts over the last week, noted ING. 

“Speculators reduced 22,606 lots to the net long position, leaving them with a net long position of 103,539 lots as of last Tuesday. Money managers added gross shorts by 26,702 lots to 115,849 lots, the largest weekly increase since the September start,” said ING.

“Similarly, for NYMEX WTI, speculators decreased their net long by 18,043 lots over the week to 125,942 lots for the week ending on Nov. 12.”