Oil futures extended gains on Thursday morning, after sharply rising in the first portion of the week, as traders weighed additional supply disruptions following reports of storm damage at a major export terminal system on the Black Sea.

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Brent futures were up about $1.06, or 0.9%, to $122.66 a barrel and U.S. West Texas Intermediate futures were up about 79 cents, or 0.7%, to $115.68 a barrel at 0051 GMT. U.S. futures opened the session down slightly.
 

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Both contracts have posted steep gains this week, with Brent futures up more than $14 a barrel, or 13%, since Monday and WTI climbing over $10 a barrel, or 10%, over that time period as worries over supply disruptions have intensified along with the impact of Russia`s invasion of Ukraine.

Oil markets jumped by more than 5% on Wednesday following reports that crude exports from Kazakhstan`s Caspian Pipeline Consortium (CPC) terminal had completely halted following storm damage. Russia`s Deputy Prime Minister said oil supplies could be stopped for two months.

The CPC pipeline carries about 1.2 million barrels per day of mainly Kazakh crude to a port on the Russian Black Sea coast.

Also boosting futures was a decline in U.S. inventories. Stockpiles in the U.S. fell by 2.5 million barrels last week, while inventories from the U.S. Strategic Petroleum Reserve declined by 4.2 million barrels, according to data from the U.S. Energy Information Administration. Market participants had expected a modest increase in supplies.

U.S. oil production remained flat at 11.6 million barrels per day, according to EIA data.

"The oil market is very tight and with U.S. production remaining steady and as stockpiles continue to decline, oil prices have only one way to go," Edward Moya, a senior market analyst with OANDA, wrote in a note.

Meanwhile, U.S. President Biden is meeting with NATO allies on Thursday and is expected announce additional sanctions on Russia over its actions in Ukraine, which Moscow calls a special operation.