Misty in the oil markets.. The European agreement on the Russian price ceiling has faltered, confusing the scene

Misty in the oil markets.. The European agreement on the Russian price ceiling has faltered, confusing the scene
Misty in the oil markets.. The European agreement on the Russian price ceiling has faltered, confusing the scene

The European dispute over the mechanism of applying a price ceiling to Russian oil and gas sales led to more tension and uncertainty in the oil market, and then the tendency for prices to new declines, and cooler temperatures across Europe failed to stimulate gains in demand for heating oil.
The European Union and the Group of Seven countries originally hoped to sign a ceiling for Russian oil yesterday, but the matter stalled, as the decision needs the support of all European Union member states to approve it.
Demand for heating fuels such as gas oil and liquefied petroleum gas remained showing few signs of recovery, despite the decrease in temperatures and the state of oversupply and low demand in the market, while expectations are heading towards an increase in demand during next December.
Oil analysts told Al-Eqtisadiah that demand is still low, while supplies are readily available from American liquefied petroleum gas exports, and abundant supplies from refineries across Europe, and weak demand has pushed prices to their lowest levels so far this year.
Analysts quoted the Bruegel Research Center in Brussels as confirming that Russian oil is currently being traded at a significant discount, compared to Brent, and its price is about $65 per barrel, pointing out that if the G7 price ceiling for Russian oil is set at a similar level, this will not cause any harm. Great Prussia.
Mufid Mandra, vice president of the Austrian energy company LMF, says that the drop in temperatures in Europe has not pushed demand to the desired levels, and some expectations indicate that the current demand scene will remain the same until early-mid December.
He stated that the failure of the European agreement on the level of the maximum price for Russian oil exports reflected severe divisions within the European Union and the difficulty in agreeing on a joint action plan to limit Russian exports, which means the continued abundance of Russian supply in the markets, especially with Russian exports heading to Asian markets. Specifically to China and India.
For his part, Andrew Morris, director of Boeri International Consulting Company, said that Greece, whose shipping industry transports a lot of oil, does not want the selling prices of Russian oil to fall below $70, while other European countries support the level of $65 a barrel. Disagreements remain, and the oil market is in a state of anticipation, with a tendency to continue bleeding prices.
He explained that determining the ideal selling price is not an easy task in the current complex market conditions, especially in light of European insistence on weakening Russian resources to stop financing the war in Ukraine. Russian production of crude oil.
For his part, Andre Gross, director of the German MMAC company, said that the main new European sanctions will begin to be applied on December 5, and will have broad repercussions on market stability and in light of consumers’ efforts to increase efforts to reduce energy prices.
He stated that questions are currently circulating in the market about how to contain the energy crisis that is causing the decline of economies, and threatens to cause interruption or rationing of supplies, pointing to the demand of some countries for a more strong and appropriate price ceiling for all parties, taking into account Russia’s complete rejection of the idea of ​​setting a price ceiling for selling production from crude oil.
In turn, Winnie Akilo, an American analyst at the international company, “African Engineering”, explained that the price closest to agreement between the governments of the European Union is about $ 65 per barrel, and that the price can be adjusted over time if necessary, pointing out that it will most likely exceed the union. European current differences and corresponds to the proposed price.
And she pointed out that at the level of the selling price of $ 65 a barrel, the maximum price will be much higher than the cost of production in Russia, noting that Russia is already selling its crude at discounts and the maximum is likely to have a minimal impact on the volume of its sales, as insurance companies and shippers must simply make sure That the merchandise they carry has been sold below the cap price.
On the other hand, oil prices fell yesterday, hovering towards their lowest levels in two months, as the price ceiling proposed by the Group of Seven countries on Russian oil was higher than the current trading levels, which reduced concerns about tight supplies.
The larger-than-expected rise in US gasoline inventories and the expansion of COVID-19 restrictions in China added downward pressure on crude prices.
Brent crude futures fell 52 cents, or 0.6 percent, to $84.89 a barrel by 1219 GMT, while US West Texas Intermediate crude futures fell 15 cents, or 0.2 percent, to $77.79 a barrel.
Both benchmarks fell by more than 3 percent yesterday, on the back of news that the planned price ceiling for Russian oil may be higher than the current market level.
The Group of Seven is considering a ceiling for Russian seaborne oil at $65 to $70 a barrel, according to a European official, although EU governments have yet to agree on a price.
Traders said some Indian and Chinese refineries were paying prices below the proposed cap level for Urals, Russia’s main export.
EU diplomats said EU governments would resume talks on a price cap today.
Oil prices also came under pressure after the Energy Information Administration said; US gasoline and distillate inventories rose significantly last week. The increase eased some concerns about a tight market.
However, crude oil inventories fell by 3.7 million barrels in the week ending November 18 to 431.7 million barrels, compared to analysts’ expectations for a decrease of 1.1 million barrels.
Meanwhile, yesterday, China recorded the largest number of daily cases of Covid-19 since the beginning of the pandemic nearly three years ago. Local authorities have tightened restrictions to stem the outbreak, adding to investor concerns about the economy and fuel demand.

The article is in Arabic

Tags: Misty oil markets . European agreement Russian price ceiling faltered confusing scene

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