Oil / Commodities - Oil fluctuated as investors weighed a pledge by the G7 to ban imports of Russian crude against a cut in official prices by Saudi Arabia and the impact of China’s energy-sapping lockdowns. WTI traded near $110 a barrel after earlier losing as much as 1.7%. Leaders of the most-industrialized countries made the vow in response to President Putin’s war in Ukraine after holding a video call with Ukraine President Zelenskiy on Sunday. A similar plan by the EU has yet to be agreed as some member states object. Saudi Arabia cut prices for buyers in Asia as COVID lockdowns in China weighed on consumption in the top importer. State-controlled Saudi Aramco lowered prices for the first time in four months, dropping its key Arab Light grade for next months’ flows to $4.40 a barrel above the benchmark it uses. Raw material prices have also been buffeted as leading central banks including the U.S. Federal Reserve tighten policy to quell a powerful surge in inflation. Some traders are expecting a pullback in oil prices as the EU struggles to get unanimity on a Russian oil ban. The downside may be limited, however, as the bloc continues with its efforts to reach consensus, keeping the market on tenterhooks. Oil remains in backwardation, with the spread between Brent’s two nearest December contracts climbing to $13.91 a barrel, close to the level seen in the initial weeks after Russia began its invasion of Ukraine.
Newsletter - May 9, 2022
Newsletter - May 9, 2022
Newsletter - May 9, 2022
Oil / Commodities - Oil fluctuated as investors weighed a pledge by the G7 to ban imports of Russian crude against a cut in official prices by Saudi Arabia and the impact of China’s energy-sapping lockdowns. WTI traded near $110 a barrel after earlier losing as much as 1.7%. Leaders of the most-industrialized countries made the vow in response to President Putin’s war in Ukraine after holding a video call with Ukraine President Zelenskiy on Sunday. A similar plan by the EU has yet to be agreed as some member states object. Saudi Arabia cut prices for buyers in Asia as COVID lockdowns in China weighed on consumption in the top importer. State-controlled Saudi Aramco lowered prices for the first time in four months, dropping its key Arab Light grade for next months’ flows to $4.40 a barrel above the benchmark it uses. Raw material prices have also been buffeted as leading central banks including the U.S. Federal Reserve tighten policy to quell a powerful surge in inflation. Some traders are expecting a pullback in oil prices as the EU struggles to get unanimity on a Russian oil ban. The downside may be limited, however, as the bloc continues with its efforts to reach consensus, keeping the market on tenterhooks. Oil remains in backwardation, with the spread between Brent’s two nearest December contracts climbing to $13.91 a barrel, close to the level seen in the initial weeks after Russia began its invasion of Ukraine.