Oil completes week of growth due to variety of factors
2022.12.23 11:37
Oil completes week of growth due to variety of factors
Budrigannews.com – On the basis of expectations that Russia will reduce its supply in the new year while a winter storm strikes large portions of the United States, oil prices rose on Friday, putting them on track to record a weekly gain.
By 05:05 ET (10:05 GMT), prospects exchanged 2.1% higher at $79.14 a barrel, while the agreement rose 2.8% to $83.27 a barrel.
After hitting a one-year low earlier this month as concerns about a recession weighed on the market, the crude benchmarks are on track to record their second consecutive weekly gain, with Brent up 4.6 percent and WTI up 5.6 percent, respectively.
In an interview with Rossiya-24 TV on Friday, Russia’s Deputy Prime Minister Alexander Novak said that Moscow may reduce its oil production by 500,000-700,000 barrels per day in response to the Group of Seven’s price cap on Russian crude exports. This provided support for the market.
The market has been waiting for Russia’s response to the price cap policy, which imposed a $60-per-barrel ceiling on Russian crude exports in an effort to cut into Moscow’s income while it fights in Ukraine and maintains supply to the global market.
On Thursday, President Vladimir Putin stated that he would sign a decree on Monday or Tuesday regarding the nation’s response to the price cap.
Also worth noting is that the first major winter storm of the season hit large parts of the United States. This caused thousands of flights to be canceled, which could make it hard for drivers to plan their trips for the holidays.
This is likely to decrease demand for jet fuel and gasoline, but it could also increase demand for, making the overall impact difficult to gauge at this point.
However, concerns about a global recession as a result of aggressive interest rate hikes and rising COVID-19 cases in China, the world’s largest crude importer, have limited oil’s price gains, putting it on track to finish a volatile year only slightly higher.
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According to OANDA analyst Edward Moya, “China is the biggest wildcard in the oil market, and optimism is still strong that the reopening will continue and eventually lead to more demand.”
