Oil shrinks after 14-year highs, focus on US oil ban

A non-functional oil pump appears on the outskirts of El Tigre, Venezuela, June 2, 2019. REUTERS / Ivan Alvarado / Files

March 8, 2022

By Sonali Paul and Mohi Narayan

NEW DELHI (Reuters) – Oil prices saw Brent crude futures trading at $ 125 a barrel on Tuesday, down about 10 percent from a 14-year high in a recent session, reflecting the relief that Europeans are feeling. allies did not plan to participate in a possible US oil import ban.

Brent crude futures rose $ 2.01, or 1.63%, to $ 125 a barrel at 04:40 Greek time, after trading at $ 126.35.

West Texas Intermediate (WTI) futures rose $ 1.53, or 1.28%, to $ 120 a barrel.

“Unless the war is stopped, prices (Brent) can go anywhere from $ 156 to $ 185 a barrel,” said Ajay Kedia, director of Kedia Commodities in Mumbai.

However, holding a cap on price gains, officials said late Monday that the United States was willing to go ahead with the ban alone and that Germany, Russia’s largest buyer of crude, had rejected plans for an energy embargo.

A senior US official, speaking on condition of anonymity, told Reuters that no final decision had been made, but “it is possible (it’s only the US if it happens)”.

Russia exports about 7 million barrels a day of crude oil and petroleum products.

Russia has warned it could cut off gas supplies from Russia to Germany in response to a decision by Berlin last month to shut down the controversial new Nord Stream 2 pipeline.

“But the markets have already been priced into a major disruption to Russia’s oil exports,” Commonwealth Bank commodity analyst Vivek Dhar said in a note, noting that sanctions on Russian banks had already hit trade finance.

If all Russian oil exports were excluded from world markets, analysts said prices could rise to $ 200 a barrel, while Russia’s deputy prime minister said oil could soar to more than $ 300.

“There is no capacity in the world at the moment that can replace 7 million export barrels,” OPEC Secretary-General Mohammad Barkido told reporters at an industrial conference in Houston.

Australia’s two refineries, Viva Energy and Ampol Ltd, have said they stopped buying Russian crude after Moscow’s invasion of Ukraine.

Oil supply disruptions are coming as stocks continue to shrink globally. Five analysts polled by Reuters estimate that U.S. crude stockpiles fell by about 800,000 barrels a week through March 4.

The poll comes ahead of weekly inventory reports by the American Petroleum Institute, an industrial group, on Tuesday, and the U.S. Energy Information Administration on Wednesday.

(Report by Sonali Paul and Mohi Narayan; Edited by Simon Cameron-Moore)

Oil shrinks after 14-year highs, focus on US oil ban

Source link Oil shrinks after 14-year highs, focus on US oil ban

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