Oil prices continued to move higher on Friday morning in Asia, supported by renewed optimism surrounding U.S.-EU trade negotiations and expectations that Russia will restrict gasoline exports. Even reports of Chevron’s return to Venezuela, which analysts estimate could add around 200,000 barrels per day to global supply, have been unable to pull prices lower.
ING commodity analysts said the 18th sanction package was unlikely to affect sentiment among oil traders given the ineffectiveness of previous packages. They also noted that the EU may agree to lower the price cap but without the U.S., the original $60 price cap cannot be changed.
EU states earlier approved a fresh sanctions package on Russia that included new banking restrictions and curbs on fuels made from the nation’s petroleum. The package – the bloc’s 18th since Moscow’s full-scale invasion of Ukraine – will also cut off 20 more Russian banks from the international payments system SWIFT and impose restrictions on Russian petroleum refined in other countries. A large oil refinery in India, part-owned by Russia’s state-run oil company, Rosneft PJSC, was also blacklisted.
“While inventories globally have built very significantly, stocks in the pricing centres – especially in the US – are still quite low,” Daan Struyven, head of oil research at Goldman Sachs, said on Bloomberg Television. Market focus has shifted to “downside risks to supply,” he said.
Activity is slowing in U.S. oil fields as drillers remain in the crude-price danger zone for profits, according to one of the biggest investors of private operators in the shale patch.
The broad view of the US President Donald Trump’s first administration as exclusively told to OilPrice.com at the time by a senior legal figure in that team was: “We’re not going to put up with any more crap from the Saudis.”
Oil fell as U.S. President Donald Trump reignited his global trade war, while his latest plan to pressure Russia into a ceasefire with Ukraine didn’t include new measures aimed directly at hindering Moscow’s energy exports.
Oil prices are set to end the week higher after geopolitical risk climbed and Trump delayed tariff announcements.
The total number of active drilling rigs for oil and gas in the United States slipped again this week, according to new data that Baker Hughes published on Friday, following a 8-rig decrease in the week prior.
West Texas Intermediate advanced almost 3% to settle above $68 a barrel after President Donald Trump said he plans to make a “major statement” on Russia on Monday and reiterated criticism of President Vladimir Putin. One sanctions bill, which at least 85 senators have endorsed, would levy 500% tariffs on China and India if they make any purchases of Russian energy.