Oil / Commodities - Oil steadied ahead of an OPEC+ meeting on supply after surging on the EU’s plan for a phased ban on Russian crude. WTI traded above $108 a barrel after closing up 5.3% on Wednesday. The EU plans to ban Russian oil over the next six months and refined fuels by the end of the year to increase pressure on President Putin over his invasion of Ukraine. The bloc is also targeting insurers in a move that could dramatically impair Moscow’s ability to ship oil around the world. OPEC+ will likely ratify another small production increase when members gather later Thursday, with the threat to demand in China from anti-virus lockdowns offering another reason or caution. Still, there are signs that a lack of capacity is hobbling the group’s ability to deliver even modest increases. The EU aims to conclude the sanctions package by the end of the week, or May 9th, at the latest. To get the curbs over the line, the bloc needs to address concerns from Hungary and Slovakia on phase-out timing and queries from Greece on banning transport of oil between third countries. U.S. inventory data, meanwhile, showed declines in nationwide gasoline and distillate stockpiles. Stockpiles of diesel on the east coast slumped to the lowest on record last week as local refiners rushed to supply global markets, suggesting a potential shortage of the industrial, transport and heating fuel. Oil market remains in backwardation, with the spread between Brent’s two nearest December contracts well above $13 a barrel on Thursday, more than triple the gap at the start of the year.
Newsletter - May 5, 2022
Newsletter - May 5, 2022
Newsletter - May 5, 2022
Oil / Commodities - Oil steadied ahead of an OPEC+ meeting on supply after surging on the EU’s plan for a phased ban on Russian crude. WTI traded above $108 a barrel after closing up 5.3% on Wednesday. The EU plans to ban Russian oil over the next six months and refined fuels by the end of the year to increase pressure on President Putin over his invasion of Ukraine. The bloc is also targeting insurers in a move that could dramatically impair Moscow’s ability to ship oil around the world. OPEC+ will likely ratify another small production increase when members gather later Thursday, with the threat to demand in China from anti-virus lockdowns offering another reason or caution. Still, there are signs that a lack of capacity is hobbling the group’s ability to deliver even modest increases. The EU aims to conclude the sanctions package by the end of the week, or May 9th, at the latest. To get the curbs over the line, the bloc needs to address concerns from Hungary and Slovakia on phase-out timing and queries from Greece on banning transport of oil between third countries. U.S. inventory data, meanwhile, showed declines in nationwide gasoline and distillate stockpiles. Stockpiles of diesel on the east coast slumped to the lowest on record last week as local refiners rushed to supply global markets, suggesting a potential shortage of the industrial, transport and heating fuel. Oil market remains in backwardation, with the spread between Brent’s two nearest December contracts well above $13 a barrel on Thursday, more than triple the gap at the start of the year.