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Russian oil price cap put to the test

The price cap on Russian oil agreed by the EU, G7 and Australia is set to come into force on Monday. It aims to restrict Russia’s revenue while making sure Moscow keeps supplying the global market. – Embargo and cap – The cap is due to take effect alongside an EU embargo on maritime deliveries of Russian crude oil, which comes several months after an embargo imposed by the United States and Canada. Russia is the world’s second-largest crude exporter and without the cap it would be easy to find ...

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Fading US demand outlook leads NYMEX January gas to nine-month low

The NYMEX Henry Hub January futures contract fell below $6/MMBtu on Dec. 5, to trade at its lowest since March as the market takes stock of another restart delay at the Freeport LNG terminal and shifting weather forecasts pointing to a milder start to December than previously anticipated. After trading into the upper-$7s in late November, futures prices for January have fallen more than $2, or almost 30%, as the bullish short-term outlook for US gas supply and demand loses luster. On Dec. 1, Freeport LNG confirmed news of another ...

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Politics, products and prices intertwine again for Latin American diesel, gasoline

An unclear end to Colombia’s and Mexico’s subsidies on refined products has brought uncertainty to trade flows between the US Gulf Coast and Latin America. Colombia’s new administration under Gustavo Petro has raised questions about the end of a subsidy on fuel production. Similarly, sources in Mexico were unsure when Mexico’s tax breaks and government subsidies might end. Latin American traders are seeing the same wild swings from global forces as the rest of the world, especially for diesel, which is the top import for most countries. Traders said new ...

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Oil prices climb after Russian crude sanctions kick in

Oil rebounded on Tuesday after plunging by more than 3% in the previous session, as the implementation of sanctions on Russian seaborne crude oil eased concerns about oversupply while the relaxing of China’s COVID curbs bolstered the demand outlook. Brent crude futures had gained 85 cents to $83.53 a barrel by 0733 GMT. West Texas Intermediate crude (WTI) rose 68 cents to $77.62 a barrel. Crude futures on Monday recorded their biggest daily drop in two weeks, after U.S. service sector data raised worries that the Federal Reserve could continue ...

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Russian oil was selling at $79/barrel in Asia on Monday, well above price cap

Russia’s ESPO oil blend from the Far Eastern port of Kozmino was selling for around $79 a barrel in Asian markets on Monday – almost a third higher than the price cap imposed on Russian oil by the G7 and European Union – according to Refinitiv data and estimates from industry sources. Russia exports up to 65 million tons of ESPO Blend oil per year via the Eastern Siberia-Pacific Ocean (ESPO) pipeline, including up to 35 million tons through the port of Kozmino. Source: Reuters

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Middle distillate tightness to persist

Low middle distillate inventories Middle distillate inventories are tight around the globe. In the US, distillate fuel oil stocks are at their lowest levels on record for this time of year. And the tightness is even more extreme on the US East Coast. In Europe and specifically the ARA region, gasoil stocks are at their lowest levels since 2008 for this stage of the year, according to Insights Global. In Singapore, middle distillate stocks are down at levels last seen back in 2004 for this time of year. The tightness ...

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Europe wary of Turkish hub to hide gas ‘made in Moscow’

President Vladimir Putin’s plan to make Turkey a hub for Russian gas in theory could allow Moscow to mask its exports with fuel from other sources, but that might not be enough to persuade Europeans to buy, analysts and sources said. Russia supplied 40% of the European Union gas market until Moscow on Feb. 24 sent tens of thousands of troops into Ukraine in what it calls a “special military operation”. Since then, the West has introduced sweeping sanctions, including on Russian oil and gas, cut its purchases of the ...

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Russian oil revenues could weather EU ban, G7 price cap

Russian oil output could fall by 500,000 to 1 million barrels per day (bpd) early in 2023 after the European Union imposes a ban on seaborne imports from Monday, two sources at major Russian producers said. The estimate is at the lower end of market analysts’ forecasts of the combined impact of the ban and a proposed price cap on Russian oil, although the sources said the true level would depend on several factors yet to be settled. They requested anonymity to discuss sensitive market dynamics connected with the conflict ...

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‘Uncertainty shrouds’ Europe capping Russian oil price

Europe’s decision to enforce a price cap of $60 per barrel on Russian oil to drive down the country’s oil revenues without causing a surge in prices is theoretically bearish, said MUFG, a Japanese bank holding and financial services firm. “We have been sceptical on the practicalities of its success,” said MUFG’s Global Markets Research wing. MUFG draws three key conclusions of what could transpire next – beyond Russia’s reaction function – acknowledging that the above conditionalities may vary significantly over time and with global supply-demand balances: Chinese demand Perhaps ...

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Can carbon offset crude move from idea to reality?

Back in 2019, Shell sold the world’s first carbon offset LNG cargo (COLNG) to Tokyo Gas in a deal that offset the emissions from the entire LNG value chain. Since then, more than 30 COLNG deals have been reported globally, with an estimated 5.5 MtCO2e offset – many using Wood Mackenzie’s LNG Carbon Emissions Tool to estimate emissions. The obvious next step would be to extend this approach to crude. However, in the three years since that first cargo there has been little movement in the crude markets to price ...

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Russia says oil price cap won’t stop it from financing Ukraine war effort

Russia said on Monday that a Western price cap on its oil would destabilise global energy markets but would not affect its ability to sustain what it calls its “special military operation” in Ukraine. Kremlin spokesman Dmitry Peskov said Russia was preparing its response to Friday’s move by the G7 and allies, which was aimed at squeezing Moscow’s energy revenues and reducing its ability to wage war. “Russia and the Russian economy have the required capacity to fully meet the needs and requirements of the special military operation,” Peskov told ...

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Russia renews missile attacks on Ukraine as G7 pressures Moscow with oil price cap

Ukraine said Russia had destroyed homes in the south and knocked out power in the north in a new round of missile attacks on Monday as the West tried to limit Moscow’s ability to finance its invasion by imposing a price cap on Russian seaborne oil. Air alerts sounded across Ukraine and officials urged civilians to take shelter from what they said was the latest in waves of Russian missile strikes since its Feb. 24 invasion. Two people were killed in the Zaporizhzhia region where several houses were destroyed, the ...

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Saudi Arabia cuts January Arab Light crude prices to Asia -Aramco

Saudi Arabia lowered the January official selling prices (OSPs) for the flagship Arab light crude it sells to Asia to plus $3.25 a barrel versus the Oman/Dubai average, the country’s state oil producer Aramco said on Monday. The price is $2.20 a barrel less than the December OSP. The top oil exporter set its Arab Light OSP to northwest Europe at minus $0.10 a barrel against ICE Brent for January, $1.80 a barrel lower than its price for December. The OSP to the United States was unchanged from last month ...

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Energy worries intensify

Oil market more comfortable for now Oil demand has disappointed so far this year. Higher prices helped lead to some demand destruction, evident when looking at US implied gasoline demand over the summer. However, the big drag on demand this year is China and its insistence on following its zero-Covid policy. There had been expectations that oil demand would bounce back following the easing of lockdowns in Shanghai and Beijing in towards the second half of the year. However, clearly, we continue to see restrictions across parts of China weighing ...

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U.S. oil production’s post-pandemic rebound set to slow

U.S. production of crude oil and condensates increased to 12.3 million barrels per day (bpd) in September, the highest since the first wave of the coronavirus pandemic in March 2020. Production rose by 289,000 bpd from the previous month, with contributions from the Lower 48 states (+208,000 bpd), federal waters in the Gulf of Mexico (+64,000 bpd) and Alaska (+17,000 bpd). Crude production has increased in five of the most recent seven months, according to data from the U.S. Energy Information Administration (“Petroleum supply monthly”, EIA, Nov. 30). Output has ...

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