Home Car news Oil falls as worries of supply tumultuous, and trading costs rise

Oil falls as worries of supply tumultuous, and trading costs rise


Oil falls as worries of supply tumultuous, and trading costs rise


Oil prices fell on Friday, as supply concerns of crude deliveries resume from Kazakhstan’s CPC terminal, while the European Union remains divided on whether to enforce an oil embargo on Russia.

At 0800 GMT, Brent fell $1.56, or 1.3 percent, to $117.47 a barrel, and crude from the United States West Texas Intermediate (WTI) fell $1.56, or 1.4 percent, to $110.78 a barrel, bringing both losses to more than 2%.

Both benchmarks were going for their first weekly gain in three weeks. Brent was on course for a 9% increase, while WTI was on course for a 6% increase, as supply concerns sparked by Russia’s invasion of Ukraine weighed in.

Both the United States and the United Kingdom, both less reliant on Russian oil, have imposed restrictions on Russian crude. The EU, which is heavily dependent on Russian oil and gas, is facing a bigger challenge about whether to impose sanctions on the sector.

“As the world’s largest buyer of Russian oil, Europe rapidly endeavors to cut Russia’s imports, and higher global oil prices will rise,” J.P. Morgan experts said in a statement.


OPEC officials say the group’s authorities suspected a possible EU ban on Russian oil would dissipate consumers, and that the organization had communicated its concerns to Brussels.

Analysts said the market remains vulnerable to any supply shock, with global stockpiles at their lowest levels since 2014.

Concerns have surfaced as the Caspian Pipeline Consortium (CPC) terminal on Russia’s Black Sea coast was forced to stop exporting on Wednesday due to a major storm.

Exports from the terminal were expected to resume on Friday, citing one of the three storm-damaged mooring points, according to Kazakh Energy Minister Bolat Akchulakov.

Responding to market volatility, the Intercontinental Exchange (ICE) increased price margins for Brent futures by 19% for the May contract, the third increase this year.

Futures margin rates are rising when markets are volatile and the move makes transactions more expensive because it forces traders to increase the amount they hold at the exchange for each contract to demonstrate they can fulfill their obligations.

In an effort to minimize supply concerns, the United States said it was negotiating with partners on a possible future recovery of oil from storage. Sources said the United States was scheduled to unveil a deal to supply more liquefied natural gas (LNG) to Europe this year and next.




Please enter your comment!
Please enter your name here