Crude oil climbs near five-month high; top oil execs rip calls for fast energy transition

Crude oil futures rose Monday to settle at their highest since late October, as Ukrainian drone attacks on Russian refineries are believed to have idled a significant chunk of Russia’s refining capacity, and Chinese industrial production for January-February exceeded expectations.

“Preliminary estimates suggest ~15% of Russia’s refining capacity has been disrupted in recent days, potentially leading to a short-term decrease in crude oil exports,” SPI Asset Management’s Stephen Innes says, according to Dow Jones.

The oil market also was helped by some upbeat economic data from China, where industrial production for the first two months of the year improved 7% from the same period last year, boosting the prospects for energy demand, according to XS.com analyst Samer Hasn.

Reports that Iraq will cut its oil exports to compensate for overproducing in January and February also help, Mizuho’s Robert Yawger says, but “it is the red hot gasoline market that is leading the energy sector higher.”

Front-month Nymex crude (CL1:COM) for April delivery ended +2% to $82.72/bbl, its highest settlement value since October 27, and front-month May Brent crude (CO1:COM) closed +1.8% to $86.89/bbl, its best settlement since October 31.

In other energy markets, U.S. gasoline futures closed at their highest since August 31, with front-month April gasoline (XB1:COM) closing +1.3% to $2.76/gal.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UGA)

Oil industry executives at the CERAWeek by S&P Global conference in Houston strongly opposed efforts to quickly move away from fossil fuels, saying society risks paying steep costs to replace oil and gas.

“We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately, reflecting realistic demand assumptions, as long as essential,” Saudi Aramco (ARMCO) CEO Amin Nasser told the conference.

Other oil execs echoed that view, with Shell’s (SHEL) Wael Sawan criticizing government bureaucracy in Europe for slowing needed development.

Oil and gas will play a role in the global energy needs for a “long, long, long time to come,” Sawan said, adding he hopes the world will move beyond a dialogue that “seems to fixate” on the notion of choosing between fossil fuels or renewables like solar and wind – “It’s all. And we need them in abundance.”