Oil muted as price cap proposal eases supply concerns

Oil muted as price cap proposal eases supply concerns By Reuters

Breaking News

‘;

Commodities 22 minutes ago (Nov 24, 2022 03:55PM 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 Nia Williams

(Reuters) -Benchmark Brent oil edged lower on Thursday while West Texas Intermediate (WTI) crude held steady, hovering in sight of two-month lows as the level of a proposed G7 cap on the price of Russian oil raised doubts about how much it would limit supply.

A bigger-than-expected build in U.S. gasoline inventories and widening COVID-19 controls in China also added downward pressure on crude prices.

Brent crude futures were down 29 cents, or 0.3%, to $85.12 a barrel by 15.15 p.m. ET (2015 GMT), while U.S. WTI crude futures rose 2 cents, to $77.96.

Trading volumes were thin because of the Thanksgiving holiday in the United States.

Both benchmarks plunged more than 3% on Wednesday on news the planned price cap on Russian oil could be above the current market level.

European Union governments remained split over what level to cap Russian oil prices at to curb Moscow’s ability to pay for its war in Ukraine without causing a global oil supply shock, with more talks possible on Friday if positions converge.

The G7 group of nations is looking at a cap on Russian seaborne oil at $65-$70 a barrel, a European official said, though European Union governments have yet to agree on a price.

A higher price cap could make it attractive for Russia to continue to sell its oil, reducing the risk of a supply shortage in global oil markets.

Some Indian refiners are paying the equivalent to a discount of around $25 to $35 a barrel to international benchmark Brent crude for Russian Urals crude, two sources said. Urals is Russia’s main export crude.

“The Russian price cap is another catalyst that served to get prices lower over the last little while,” said Bart Melek, global head of commodity market strategy at TD Securities, adding he was fairly bullish on oil despite the headwinds.

Oil prices also came under pressure after the Energy Information Administration (EIA) said on Wednesday that U.S. gasoline and distillate inventories rose substantially last week. [EIA/S]

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

China on Wednesday reported the highest number of daily COVID-19 cases since the start of the pandemic nearly three years ago. Local authorities tightened controls to stamp out the outbreaks, adding to investor concern over the economy and fuel demand.

Oil muted as price cap proposal eases supply concerns

Avian flu outbreak wipes out 50.54 million U.S. birds, a recordBy Reuters – Nov 24, 2022

By Tom Polansek CHICAGO (Reuters) -Avian flu has wiped out 50.54 million birds in the United States this year, making it the country’s deadliest outbreak in history, U.S….

U.S. President Biden says Russian oil price cap in playBy Reuters – Nov 24, 2022

NANTUCKET, Mass. (Reuters) -U.S. President Joe Biden said on Thursday that price caps on Russian oil being proposed under the Group of Seven nations (G7) scheme were in play,…

G7 to discuss Ukraine winter aid in Bucharest next week, Germany saysBy Reuters – Nov 24, 2022

BERLIN (Reuters) – Foreign ministers from the Group of Seven (G7) will discuss how to further support Ukraine in ensuring its energy supply during a meeting in Bucharest next…

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