(MENAFN- Trend News Agency)
Oil trickled down on Thursday, hovering around two-month lows,
as the proposed price cap on Russian oil from Group of Seven (G7)
nations was considered higher than the current trading levels,
alleviating concerns over tight supply, trend reports with reference to reuters .
A greater-than-expected build in U.S. gasoline inventories and
widening COVID controls in China added to downward pressure.
Brent crude futures dipped 21 cents, or 0.3%, to $85.20 a barrel
by 0431 GMT, while U.S. West Texas Intermediate (WTI) crude futures
fell by 16 cents, or 0.2%, to $77.78 a barrel.
Both benchmarks plunged more than 3% on Wednesday on news the
planned price cap on Russian oil could be above the current market
The G7 is looking at a cap on Russian seaborne oil at $65-$70 a
barrel, according to a European official, though European Union
governments have not yet agreed on a price.
The range of $65‑$70 would be higher than markets had expected,
Commonwealth Bank commodities analyst Vivek Dhar said in a report.
It would reduce the risk of global supply being disrupted, Dhar
'If the EU agree to an oil price cap of $65‑$70/bbl this week,
we see downside risks to our oil price forecast of $95/bbl this
quarter,' Dhar said.
Commonwealth Bank's forecast assumed EU sanctions accompanied by
a price cap on Russian oil would disrupt enough supply to offset
ongoing global growth concerns, he said.
Some Indian and Chinese refiners are paying prices below the
proposed price cap level for Urals crude, traders said. Urals is
Russia's main export crude.
EU governments will resume talks on the price cap on Thursday or
Friday, according to EU diplomats.
Oil prices also came under pressure after the Energy Information
Administration (EIA) said on Wednesday that U.S. gasoline and
distillate inventories had both risen substantially last week. The
increase alleviated some concern about market tightness.
But crude inventories fell by 3.7 million barrels in the week to
Nov. 18 to 431.7 million barrels, compared with analysts'
expectations in a Reuters poll for a 1.1 million-barrel drop.
'EU oil sanctions aside, so long as lockdowns continue to dot
the landscape, the oil market's top-side aspirations will be
limited,' said Stephen Innes, managing partner at SPI Asset
Management, in a note.
China on Wednesday reported the highest number of daily COVID-19
cases since the start of the pandemic began nearly three years ago.
Local authorities tightened controls to stamp out the outbreaks,
adding to investor worries about the economy and fuel demand.
Meanwhile, Chevron Corp could soon win U.S. approval to expand
operations in Venezuela and resume trading its oil once the
Venezuelan government and its opposition resume political talks,
four people familiar with the matter said on Wednesday.
Both Venezuelan parties and U.S. officials are pushing to hold
talks in Mexico City this weekend, the people said. They would be
the first such talks since October 2021 and could pave the way for
easing U.S. oil sanctions on the nation, a member of the
Organization of the Petroleum Exporting Countries (OPEC).