A gas pump hangs from the ceiling at a gas station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak/File Photo
April 7 – Oil prices fell $2 after rising at the start of Thursday’s session amid uncertainty that the euro zone will be able to effectively sanction Russian energy exports and after consuming nations announced a huge had announced the release of oil from emergency reserves.
Brent crude futures were down $2.13, or 2.1%, at $98.94 a barrel by 12:05 p.m. EDT (1405 GMT), while US West Texas Intermediate (WTI) crude was down $1.7, or 1 .9% to $94.36 a barrel.
Both benchmarks were down more than 5% in the previous session, to their lowest closing levels since March 16.
The European Union’s top diplomat Josep Borrell said at a NATO meeting on Thursday that new EU measures, including a ban on Russian coal, could be passed on Thursday or Friday and the bloc would next discuss an oil embargo. Continue reading
However, the coal ban would take full effect from mid-August, a month later than originally planned.
“No one wants to bite the bullet and sanction Russian energy that has been propping up the market,” said Bob Yawger, Mizuho’s director of energy futures.
Prices have also been pressured by fears that lockdowns in China due to a new wave of the coronavirus pandemic could hamper oil demand recovery.
Multiple outbreaks of COVID-19 had led to widespread lockdowns in Shanghai, China’s most populous city.
“The demand situation in China is really not looking good, especially when we have so much new supply in the market,” said John Kilduff, a partner at Again Capital LLC in New York.
International Energy Agency member countries on Wednesday agreed to release 60 million barrels on top of a release of 180 million barrels announced last week by the United States to lower prices amid supply fears following Russia’s invasion of Ukraine. Continue reading
Japan will release 15 million barrels of oil from state and private reserves as part of the move, Kyodo news agency reported Thursday. Continue reading
“While this is the biggest release since the supply was created in 1980, it ultimately won’t change fundamentals in the oil market,” ANZ Bank said of the US release.
ANZ argued that the release is likely to delay further increases in production at key producers and could give OPEC+ more “breathing room amid calls for further increases in production”.
Other analysts, however, see the shares’ release as a major relief amid concerns about market tightness.
“With these volumes, previous concerns about tight supply are no longer warranted, as can be seen from price action,” Commerzbank said, noting that Brent prices have fallen about $12 since the first announcement of a U.S. Dollars plummeted last week.
Additionally, Ahmad Ghaddar in London, reporting from Sonali Paul in Melbourne and Muyu Xu in Beijing; Edited by Jan Harvey and Bernadette Baum