The sticker reads Crude Oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Portal/Angus Mordant
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- Russia halted oil exports through the southern section of the Druzhba pipeline
- EU presents ‘final’ text on revitalizing Iran nuclear deal
- Dollar lower as traders await US inflation report
- Recession, demand expectations are also weighing on the market
- Coming Soon: API Supply Report, 2030 GMT
NEW YORK, Aug 9 (Portal) – Oil prices teetered on Tuesday as fears that a slowing economy could slash demand vied with news that some oil exports on the Druzhba pipeline from Russia to Europe, which crosses Ukraine , had been suspended.
Crude oil prices have been under pressure for weeks as fears mounted that a recession could reduce oil demand.
Brent crude was down 77 cents, or 0.8%, to $95.88 a barrel as of 1:01 p.m. EDT (1701 EDT). US West Texas Intermediate (WTI) crude fell 88 cents, or 1%, to $89.88 a barrel. At the start of the session, both benchmarks were up more than $1 a barrel.
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Russian pipeline monopoly Transneft said Ukraine suspended oil flow through the pipeline because Western sanctions prevented Moscow from paying transit fees. That pushed prices higher earlier in the session. Continue reading
Rivers along the southern route of the Druzhba pipeline were affected, while the northern route, which served Poland and Germany, was uninterrupted.
“Not that we need it at this point, but it’s another reminder of how tight the market is and how sensitive price is to supply disruptions, particularly those from Russia,” said Craig Erlam of brokerage firm OANDA.
Prices have been pressured by talks of a last-ditch effort by European nations to revive the nuclear deal with Iran. On Monday, the European Union presented a “final” text to revive the 2015 Iran deal. A senior EU official said a final decision on the proposal, which requires US and Iranian approval, is expected within “very, very few weeks”.
The talks have dragged on for months without an agreement.
Iran’s crude oil exports are at least 1 million barrels a day below their rate in 2018, when former US President Donald Trump pulled out of the nuclear deal, according to tanker trackers.
Oil is now down more than $40 from its peak following the Russian invasion of Ukraine, which brought Brent to $139 a barrel in the short term.
On sight is the latest round of US weekly oil supply reports, first from the American Petroleum Institute at 2030 GMT. Analysts expect crude inventories to drop slightly by 400,000 barrels.
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Additional reporting by Alex Lawler, Sonali Paul and Emily Chow Editing by Louise Heavens, Mark Potter, Barbara Lewis and David Gregorio
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