The Wall Street Journal reported that some members of the Organization of the Petroleum Exporting Countries (OPEC) are considering excluding Russia from their crude output targets, which would boost output from other countries. After the report,WTI CrudeFutures prices fell on Tuesday (31st).
energy commodity prices
- Delivered in July WTI CrudeFutures fell 40 cents, or 0.4%, to settle at $114.67 a barrel, up 9.5% for the month.
- Delivered in July Brent CrudeFutures rose $1.17, or 1%, to settle at $122.84 a barrel, up 12.4% for the month.
- Natural gas futures for July delivery fell 6.7% to settle at $8.145 per million Btu.
- Gasoline futures for June delivery rose 1.6% to close at nearly $4.08 a gallon.
- Delivered in JuneThermal Fuel FuturesPrices rose 2.2 percent to $4.091 a gallon.
market driving force
Excluding Russian output from the target might pave the way for a sharp increase in output from Saudi Arabia, the United Arab Emirates (UAE) and other OPEC members, The Wall Street Journal reported. Russia is arguably the leader of OPEC+, which last year agreed to a monthly increase in output to slowly lift output cuts imposed in the wake of the 2020 coronavirus pandemic.
OPEC+ has so far rejected requests from countries such as Europe and the United States to increase production. OPEC+ is expected to hold its monthly meeting on Thursday to discuss production plans.
Oil rose early on Tuesday as investors returned to markets following Monday’s Memorial Day holiday and were happy that EU leaders had hammered out a deal that would reduce demand for energy assets in warring nations as a way to punish Russia for its invasion of Ukraine.
The “watered down” embargo covers imports of Russian oil by sea, temporarily exempting imported oil from pipeline shipments, but still requires Hungary to join. The EU said the deal covers more than two-thirds of Russia’s oil imports and should cut the country’s crude by 90 percent by the end of the year.
Robbie Fraser, Schneider Electric’s global research and analysis manager, said in the report: “This move is aimed at Russian supply, but at the same time Chinese demand is also expected to see a tailwind in the near term as China eases some epidemic prevention measures. China is a key buyer of Russian crude oil. , and is the world’s largest crude oil importer.”
After a two-month lockdown in Shanghai, China, authorities announced on Wednesday that they would lift the lockdown in a big way. Beijing also eased restrictions on epidemic prevention on Sunday and announced that the outbreak had been brought under control in recent days.
China’s factory and service sector activity improved in May, but overall economic activity still showed a contraction due to coronavirus lockdown restrictions, data showed on Tuesday.
WTI CrudeFriday’s highest close in more than 11 weeks came as the summer driving season kicked off with Memorial Day weekend, and crude inventories remained low ahead of the holiday streak.
The U.S. retail price of regular gasoline averaged $4.59 a gallon ahead of the holiday, the highest inflation-adjusted (real) price since 2012, according to the U.S. Energy Information Administration (EIA).
