Tuesday saw a spike in oil prices as a result of potential G7 sanctions against…
Oil prices have increased as a result of the US Keystone pipeline closure
Concerns about the supply of oil caused the price of crude to increase on Monday. At the same time, tensions in the Russia-Ukraine conflict increased as Russia promised to reduce production in reaction to the price cap on its oil exports.
At 10:10 a.m. local time (07:10 GMT), the price of international benchmark Brent crude was USD76.50 per barrel, up 0.52 percent from the previous trading session’s closing price of USD76.10 per barrel.
The American benchmark West Texas Intermediate (WTI) traded at USD71.61 per barrel at the same time, up 0.83 percent from the previous session’s closing price of USD71.02.
Many experts predict that the US could experience a scarcity of crude oil as a result of the Keystone pipeline’s closure following the worst oil spill in ten years.
The owner of the pipeline, TC Energy of Canada, stated, “We have not verified a date for resumption and will only resume service when it is safe to do so and with the regulator’s clearance.
Two US oil refineries are expected to experience shortages as a result of the pipeline closure, which transports more than 600,000 barrels of crude oil per day to refineries along the US Gulf Coast.
Russia’s oil output is in jeopardy.
The West’s decision to cap the price of Russian oil exports has been criticized by Russian President Vladimir Putin as “silly, damaging, and ill-considered,” and he has threatened to cut oil production and refuse to sell to any nation that does so. This has led to more supply concerns.
His comments come after the EU nations last week agreed to a USD60 per barrel price restriction for Russian crude oil exports transported by sea, to which the G7 nations and Australia have subsequently joined.
Putin issued a warning that declining prices would discourage investment in the energy sector, which might result in shortages and “skyrocketing prices.”
Putin asserted that because the USD60 restriction is so near to the price that Russia typically charges for its oil, the nation won’t suffer losses as a result of it.
Fears of a recession are rising.
Markets have benefited from China’s efforts to abandon its “zero-Covid” policies, but investor risk appetite has been constrained, pushing prices lower.
Positive services sector data last week revived worries that the US Federal Reserve would hike rates more quickly than anticipated, which led to a more than 10% drop in the price of a barrel of Brent oil.
Tuesday will see the release of the November consumer price index, which is anticipated to have an impact on the Federal Reserve’s interest rate decision.
Beginning on Tuesday, the Fed will meet for two days; on Wednesday, it is anticipated that another rate hike will be announced.
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