Oil Prices Increase as G7 Targets Russian Crude Buyers
Oil prices rose in the global commodity market on Thursday after the Group of Seven advanced economies (G7) revealed a plan to put pressure on countries buying crude oil from Russia.
Geological tensions – Middle East unrest – continue to impact the supply side, including lower China demand, while India and Russia maintain an oil deal relationship, which has resulted in sanctions from the US.
The global market saw a rebound as investors weighed a larger US crude stock build against fresh signals the Group of Seven (G7) nations will tighten the screws on Russia’s oil revenues.
Brent crude was trading at $65.46 per barrel, rising from the previous close of $65.32. US benchmark West Texas Intermediate (WTI) increased by 0.25% to $61.77 from $61.61 in the prior session.
G7 finance ministers said after a virtual meeting on Wednesday they will step up efforts to curb Russia’s oil income by targeting buyers of Russian crude and those helping Moscow sidestep sanctions.
“Now is the time to maximise pressure on Russia’s oil exports, a major source of their revenue,” the ministers said.
“We will target those who are continuing to increase their purchase of Russian oil since the invasion of Ukraine and those that are facilitating circumvention.”
The ministers said they would phase out remaining Russian hydrocarbon imports, consider restrictions on refined products, and weigh penalties on countries aiding Moscow’s war effort.
They said further steps will be discussed at the IMF and World Bank meetings in Washington on Oct. 15. The prospect of tougher sanctions on Russian crude added support to prices, with traders weighing potential disruptions to global supply.
Meanwhile, the Energy Information Administration said in its Weekly Petroleum Status Report that US crude inventories increased by 1.8 million barrels last week to 416.5 million, topping forecasts for a 1.5 million-barrel gain.
The bigger-than-expected rise suggested weaker refining activity and softer demand, keeping a lid on prices after recent losses. Strategic petroleum reserves, excluded from commercial inventories, grew by 700,000 barrels to 406.7 million. Gasoline inventories also climbed, adding 4.1 million barrels to 220.7 million.
Investors are also awaiting the Oct. 5 OPEC+ meeting, where Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman are expected to decide November output.
The group agreed last month to raise production by 137,000 barrels a day in October. Analysts say expectations of further increases are reinforcing forecasts of excess supply in global markets. Oando Slides by 6.12% on Fresh Selloff
