Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Oil slides over 3% on Russian price cap talks, U.S. gasoline build

Commodities Nov 23, 2022 03:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. Picture taken December 7, 2018. REUTERS/Stringer
 
LCO
+2.68%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
+2.80%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Arathy Somasekhar

HOUSTON (Reuters) - Oil prices fell more than 3% on Wednesday, continuing a streak of volatile trading, as the Group of Seven (G7) nations considered a price cap on Russian oil above the current market level and as gasoline inventories in the United States built by more than analysts' expected.

Brent futures for January delivery fell $2.95, or 3.3%, to settle at $85.41 a barrel. U.S. crude fell $3.01, or 3.7%, to $77.94 per barrel. In early trade, both contracts had risen by over $1 a barrel.

U.S. gasoline stocks rose by 3.1 million barrels, according to the Energy Information Administration, far exceeding the 383,000 barrel build that analysts had forecast.

"The build in gasoline is kind of a shock," said Phil Flynn, an analyst at Price Futures group. "The increase in gasoline supplies suggests that maybe we're seeing demand weakening or that gasoline is going on the rack ahead of the holidays."

EIA data also showed a 3.7 million barrel draw in crude inventories, compared with analysts' expectations in a Reuters poll for a 1.1 million-barrel drop.

Prices were hit further by reports that the G7 price cap on Russian oil could be above the level it is trading.

G7 nations are looking at a price cap on Russian seaborne oil in the range of $65-70/bbl, according to a European official on Wednesday.

Meanwhile, Urals crude delivered to northwest Europe is trading around $62-$63/bbl, although it is higher in the Mediterranean at around $67-$68/bbl, Refinitiv data shows.

Because production costs are estimated at around $20 per barrel, the cap would still make it profitable for Russia to sell its oil and in this way prevent a supply shortage on the global market.

A senior U.S. Treasury official said on Tuesday that the price cap will probably be adjusted a few times a year.

The news added to concerns about demand from top crude oil importer China, which has been grappling with a surge in COVID-19 cases, with Shanghai tightening rules late on Tuesday.

Further pressure came from an OECD economic outlook anticipating a deceleration in global economic expansion next year.

"On the bright side, the OECD does not envisage a global recession and maybe this helped oil prices and stocks strengthen further," said analyst Tamas Varga at PVM Oil Associates.

Price found some support after minutes from the Federal Reserve's November meeting showed most policymakers agreed it would soon be appropriate to slow interest rate hikes.

(This story has been refiled to fix garbled text in first paragraph)

Oil slides over 3% on Russian price cap talks, U.S. gasoline build
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (10)
Lakshmi Narasimhan
Lakshmi Narasimhan Nov 23, 2022 1:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Better become a vegetarian....-;)
Robert Cutler
Robert Cutler Nov 23, 2022 11:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Crude oil price $ppb now correct at Putin's age
Kerry Ditto
Kerry Ditto Nov 23, 2022 10:41AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
stock market tries to imitate inflation. Fed does not like it. fed has to be aggressive, break the arrogance of stock market.
Kerry Ditto
Kerry Ditto Nov 23, 2022 10:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
fed should hike 100 bps in dec.
Kerry Ditto
Kerry Ditto Nov 23, 2022 10:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
maybe bake bread with turkey shape will do.
Kerry Ditto
Kerry Ditto Nov 23, 2022 10:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
poultry prices are too high, eat cheap stuff, skipping turkey.
Lakshmi Narasimhan
Lakshmi Narasimhan Nov 23, 2022 10:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Become vegetarian.....-;)
Who Knows
Who Knows Nov 23, 2022 9:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Yesterday Biden 'caesar' told G7 should give early their price cap, and they do today following the boss...only spreading *******to hide the whole world knee on usa economy and orders...let's see opec+ and the east...for china will be a precious chance to increase global power weakening usa if they act properly...
Who Knows
Who Knows Nov 23, 2022 9:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They try to limit brent at 100$, knowing this cap will be only a dream....I expect the russian reaction cutting supply to no friendly countries, and saudies supporting them to avoid to be blackmail again and again by usa gangs...the losser, europeans, as always to no be so clever and independent of usa empire interested moves to own and exploit every country to save their economy..
lakes Tenn
lakes Tenn Nov 23, 2022 8:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Russia will just sell to China, India and Africa. oil will be even more expensive for eu.
Brad Albright
Brad Albright Nov 23, 2022 8:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Another prediction likely as accurate ad your red wave.
Mary Mullin
Mary Mullin Nov 23, 2022 8:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Brad Albright blah blah blah
choi borsa
choi borsa Nov 23, 2022 7:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
65-70 only in their dreams.
Vong Nguyen
Vong Nguyen Nov 23, 2022 7:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Your nightmare will come true
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email