Oil drops as Russian price cap proposal eases tight supply fears

Oil falls as supply-disruption fears ease amid Russian price cap talks By Reuters

Breaking News

‘;

Commodities 1 hour ago (Nov 23, 2022 09:15PM ET)

(C) Reuters. FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS/Agustin Marcarian/File Photo/File Photo

By Yuka Obayashi

TOKYO (Reuters) – Oil prices fell on Thursday, extending losses from the previous session, as fears of supply disruption eased on news that the Group of Seven (G7) nations were considering a high price cap on Russian oil.

A greater-than-expected build-up in U.S. gasoline inventories added to downward pressure.

Brent crude futures had slid 43 cents, or 0.5%, to $84.98 a barrel by 0102 GMT, while U.S. West Texas Intermediate (WTI) crude futures dropped 35 cents, or 0.5%, to $77.59 a barrel.

Both benchmark contracts plunged more than 3% on Wednesday on news that the planned price cap could be above the current market level.

The G7 is looking at a cap on Russian seaborne oil in the range of $65-70/bbl, according to a European official, though European Union governments have not yet agreed with each other on the matter.

The range of $65-70/bbl would be higher than markets had expected, Commonwealth Bank commodities analyst Vivek Dhar said in a report. It would reduce the risk of global supply being disrupted, Dhar said.

“If the EU agree to an oil price cap of $65-70/bbl this week, we see downside risks to our oil price forecast of $95/bbl this quarter,” Dhar said, adding that the forecast assumed EU sanctions accompanied by a price cap on Russian oil would disrupt enough supply to offset ongoing global growth concerns.

EU governments will resume talks on Thursday evening or on Friday, according to EU diplomats.

Oil prices also came under downward pressure after the Energy Information Administration (EIA) said on Wednesday that U.S. gasoline and distillate inventories had both risen substantially last week. The increase alleviated some concern about market tightness. [EIA/S]

But crude inventories fell by 3.7 million barrels in the week to Nov. 18 to 431.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.1 million-barrel drop.

Meanwhile, Chevron Corp (NYSE:CVX) could soon win U.S. approval to expand operations in Venezuela and resume trading its oil once the Venezuelan government and its opposition resume political talks, four people familiar with the matter said on Wednesday.

Both Venezuelan parties and U.S. officials are pushing to hold talks in Mexico City this weekend, the people said. They would be the first such talks since October 2021 and could pave the way for easing U.S. oil sanctions on the OPEC nation.

Also pressuring oil prices lower, Chinese cities imposed more curbs on Wednesday to rein in rising coronavirus cases, adding to investor worries about the economy and fuel demand.

Oil falls as supply-disruption fears ease amid Russian price cap talks

Oil hovers near 2-month low as weaker dollar helps stem deep lossesBy Investing.com – Nov 23, 2022

By Ambar Warrick
Investing.com– Oil prices hovered near two-month lows on Thursday after easing concerns over Russian supply and a worsening economic outlook drove sharp losses…

Gold rises past $1,750 as Fed members tout slower rate hikesBy Investing.com – Nov 23, 2022

By Ambar Warrick
Investing.com– Gold prices rose past key levels on Thursday, benefiting from a weaker dollar as the minutes of the Federal Reserve’s latest meeting showed that a…

U.S. prepared to authorize Chevron to boost Venezuela’s oil outputBy Reuters – Nov 23, 2022

By Marianna Parraga HOUSTON (Reuters) – Chevron Corp (NYSE:CVX) could soon win U.S. approval to expand operations in Venezuela and resume trading its oil once the Venezuelan…

Our Apps



Terms And Conditions
Privacy Policy
Risk Warning

(C) 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

About the author

Related