{"id":2435,"date":"2022-11-24T15:20:15","date_gmt":"2022-11-24T15:20:15","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=2435"},"modified":"2022-11-24T15:20:17","modified_gmt":"2022-11-24T15:20:17","slug":"oil-drops-as-price-cap-proposal-eases-supply-concerns","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/2435\/","title":{"rendered":"Oil drops as price cap proposal eases supply concerns"},"content":{"rendered":"
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Oil prices fell on Thursday, hovering around two-month lows as the level of a proposed G7 cap on the price of Russian oil raised doubts about how much it would limit supply.<\/p>\n\n\n\n

A bigger than expected build in U.S. gasoline inventories and widening COVID-19 controls in China also added downward pressure on crude prices.<\/p>\n\n\n\n

Brent crude futures were down 77 cents, or 0.9%, to $84.64 a barrel at 1445 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 36 cents, or 0.5%, to $77.58.<\/p>\n\n\n\n

Both benchmarks plunged more than 3% on Wednesday on news the planned price cap on Russian oil could be above the current market level.<\/p>\n\n\n\n

The G7 group of nations is looking at a cap on Russian seaborne oil\u00a0at $65-$70 a barrel, a European official said, though European Union governments have yet to agree on a price.<\/p>\n\n\n\n

A higher price cap could make it attractive for Russia to continue to sell its oil, reducing the risk of a supply shortage in global oil markets.<\/p>\n\n\n\n

The Kremlin on Thursday said Russia does not\u00a0plan to supply\u00a0oil and gas to countries that support the cap but it will make a final decision once it analyses the figures.<\/p>\n\n\n\n

“When one considers that the current Russian export price is below the proposed limit, the price cap automatically implies uninterrupted Russian exports,” said PVM Oil analyst Tamas Varga.<\/p>\n\n\n\n

Some Indian refiners\u00a0are paying\u00a0the equivalent to a discount of around $25 to $35 a barrel to international benchmark Brent crude for Russian Urals crude, two sources said. Urals is Russia’s main export crude.<\/p>\n\n\n\n

EU governments\u00a0will resume talks\u00a0on the price cap on Thursday or Friday, EU diplomats said.<\/p>\n\n\n\n

Oil prices also came under pressure after the\u00a0Energy Information Administration (EIA)\u00a0said on Wednesday that U.S. gasoline and distillate inventories rose substantially last week.<\/p>\n\n\n\n

But crude inventories\u00a0(USOILC=ECI)\u00a0fell by 3.7 million barrels to 431.7 million barrels in the week to Nov. 18, compared with expectations for a 1.1 million barrel drop in a Reuters poll of analysts.<\/p>\n\n\n\n

China on Wednesday reported the\u00a0highest number of daily COVID-19 cases since the start of the pandemic nearly three years ago. Local authorities\u00a0tightened\u00a0controls to stamp out the outbreaks, adding to investor concern over the economy and fuel demand.<\/p>\n\n\n\n

Meanwhile, Chevron Corp could soon win U.S. approval to\u00a0expand operations in Venezuela\u00a0and resume trading its oil once the Venezuelan government and its opposition resume political talks, four people familiar with the matter said on Wednesday.<\/p>\n\n\n\n

Venezuelan parties and U.S. officials are pushing to hold talks in Mexico City this weekend, the sources said. It would be the first such talks since October 2021 and could pave the way for easing U.S. oil sanctions on OPEC member Venezuela.<\/p>\n

Updated on