Free Trial

Crude Holding onto Decline as Price Cap Discussions Continue

OIL

Crude holding onto small daily losses as EU members struggle to come to an agreement on the Russian oil price cap details.

  • The higher than expected price cap under consideration of 65-70$/bbl is likely to lead to a reduced drop off in Russian output than forecast with the current Urals price at or even below the suggested cap level. Countries such as Poland and Estonia are rejecting the cap as not ambitious enough and Greece do not want the level below 70$/bbl. The G7 announcement is waiting on an agreement from the EU members.
  • Rising US recession fears and increasing lockdowns in China are weighing on weak oil demand growth expectations and adding to the downside market pressure.
  • Brent is falling faster than WTI therefore closing the front month spread with WTI up to a -7$/bbl discount.
  • Next Jan23 contract technical support on Brent is 82.31$/bbl and WTI at 74.96$/bbl.
    • Brent JAN 23 down -0.7% at 84.78$/bbl
    • WTI JAN 23 down -0.2% at 77.76$/bbl
    • WTI-Brent up 0.31$/bbl at -7.03$/bbl
    • Brent JAN 23-FEB 23 down -0.27$/bbl at 0$/bbl
    • Brent JUN 23-DEC 23 down -0.12$/bbl at 2.68$/bbl

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.