Oil prices rose and headed for a second weekly gain as Russia said it may trim crude oil production in response to the Group of Seven’s price cap on its exports, highlighting risks to global supplies in the new year.
est Texas Intermediate surged to more than $79 a barrel, putting it on track for about a 7 percent gain for the week. Russia could cut production by 500,000 to 700,000 barrels a day in response to the cap, Deputy Prime Minister Alexander Novak was quoted as saying by the state news service Tass.
As the war in Ukraine rages on, traders have been waiting for Moscow’s full response to the cap, a policy that imposed a $60-per-barrel cap on Russian crude in a bid to squeeze Kremlin revenues while keeping exports in the market to keep. President Vladimir Putin plans to sign a decree on the nation’s response to the threshold on Monday or Tuesday, which will include unspecified “preventive measures.”
“Risk-on sentiment and a weaker US dollar are helping oil today,” said Giovanni Staunovo, commodities analyst at UBS. “The Russian comments are also helping, but the market probably wants to see it before believing, hence a muted reaction.”
There were early signs that the cap would impede Russian oil flow, an impact that would run counter to stated goals. In the first full week after the limit went into effect on Dec. 5, along with an EU ban on Russian imports by sea and insurance restrictions, the total volume shipped out of the country fell 54 percent, according to tanker tracking reports compiled by Bloomberg data showed.
While China’s rapid departure from Covid Zero has boosted demand prospects next year, the rapid shedding of curbs has been disruptive. Several mobility measures, including traffic congestion in major cities, subway use and the number of domestic flights, have plummeted as cases rise. However, the country is also relaxing quarantine rules for air travel, which should boost consumption.
In the US, data showed a decline in commercial crude inventories, with nationwide inventories for this time of year hitting the lowest level since 2014.
https://www.independent.ie/business/world/oil-price-rallies-as-russia-says-it-could-start-to-cut-its-crude-exports-42241822.html Oil prices rebound as Russia announces it may start cutting its crude oil exports