Last week saw the start of the EU embargo on Russian crude oil. Simultaneously, the EU and the G7’s $60 per barrel price cap for providing services to transport the commodity took effect. Russian Ural crude’s price has fallen to trade around $55 per barrel, compared to Brent crude at nearly $80.
This week, following last week’s dip, global oil prices are expected to move slightly higher following drops in supply. Prices are up as TC Energy’s Keystone Pipeline closed down as a consequence of the oil spill in the United States. Also, Russian President Vladimir Putin’s threat to cut oil production in response to the price cap on Russian crude exports also underlines the current market sentiment.
The week ahead, ELS will be watching for bullish factors such as possible supply cuts by Russia, increasing demand from China following loosening covid lockdowns and a potentially smaller-than-earlier-expected interest rate hike by the US Federal Reserve.