On Thursday (October 27), international oil prices remained firm, as optimism brought about by record U.S. crude exports and the implementation of price caps by Western countries on Russian oil continued to benefit the oil market, despite concerns over demand and the dollar index rebounding Slowed down the pace of rising oil prices.
At 16:27 Beijing time, NYMEX crude oil futures rose 0.28% to US$88.16/barrel; ICE Brent crude oil futures rose 0.27% to US$94.04/barrel.
Weekly data from the U.S. Energy Information Administration (EIA) released overnight showed U.S. crude inventories rose by 2.588 million barrels last week and crude exports rose to a record high of 5.1 million barrels per day. Highlights a global supply shortage.
Energy prices are expected to fall by 11% in 2023, following a 60% surge in oil prices following Russia’s invasion of Ukraine, the World Bank said on Wednesday (October 26). A slowdown in global economic growth could magnify the decline.
“Stable U.S. crude oil exports boosted demand optimism and attracted fresh buying, but demand concerns weighed on sentiment,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Russia’s oil exports could fall by as much as 2 million barrels per day due to the EU embargo on Russian oil and gas products, as well as insurance and shipping restrictions that took effect from Dec. 5, the report said.
U.S. and Western officials are implementing plans to cap Russian oil prices. The World Bank warned that any plan would require the active participation of emerging market economies to be effective. Russia has previously said it will not trade with countries participating in the price cap.
A price range has yet to be determined, officials said. But a person familiar with the process said the cap would be based on a historical average of $63-$64 a barrel, potentially forming a natural cap. That level is in line with recent comments by U.S. Treasury Secretary Yellen that a price cap in the $60 range would incentivize Russia to continue producing oil.