Tuesday’s oil prices remained stable as traders anticipated the Federal Reserve’s rate hike plans and assessed their potential effects on the economy and fuel demand.
March Brent futures were up 7 cents, or 0.09%, to $79.72 per barrel. WTI crude in the United States increased by 15 cents, or 0.20%, to $74.78.
The Fed policy rate is currently at 4.251% to 4.5%. According to two U.S. Federal Reserve officials, it will need to increase to 5.0-5.251% in stages to bring higher inflation rates under control.
According to a G7 official, the Group of Seven (G7) coalition will try to impose two price caps on refined Russian goods in February, one for goods that trade at a premium to crude oil and the other for goods that trade at a discount.
The coalition, which consists of the US, Canada, Japan, and Australia, in addition to the European Union’s 27 member states, imposed a $60 per barrel price cap on Russian crude on December 5 in addition to the EU’s embargo on imports of Russian crude by sea.
To further cut down on Moscow’s income from energy exports and its capacity to finance its invasion of Ukraine, the coalition will also begin imposing price caps on Russian goods starting on February 5. These products include diesel, kerosene, and fuel oil.
But because there are numerous oil products and their prices frequently depend on where they are purchased rather than where they are produced, capping Russian oil product prices is more difficult than putting a price cap on crude alone, the official said while declining to be identified.
Russian Gas Transit to Europe 16% Lower
The mild weather in Europe has caused a 16% drop in Russian gas transit to Europe via Ukraine over the past week, according to a source familiar with the data.
Russian gas exports to Europe via the Sudzha entry point have been at 35.5 million cubic meters per day for the past five days, down from more than 40 million cubic meters in recent months, according to the gas giant Gazprom, which is under the control of the Kremlin.
In the midst of what Moscow refers to as its “special military operation” in Ukraine, which began on February 24, Russian commodity exports have grown more politicized.
Mysterious explosions damaged a major pipeline. In 2022, Russian gas exports to Europe through pipelines fell to a post-Soviet low as its biggest customer reduced imports as a result of the conflict in Ukraine.
German gas storage operators, once the largest gas consumers from Gazprom, expressed confidence on Tuesday that there won’t be any supply issues the following winter because of declining consumption and that there won’t be any shortages this winter.
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