Oil Cools With Focus on Russian Supplies, Refined Products Slump
Oil eased by the most in almost three weeks as traders monitored India’s buying of Russian crude and refined products markets slumped, leading the energy complex lower.
West Texas Intermediate futures fell 2% to settle near $59 a barrel, weighed down by losses in US equities, and have now been trading in a range of less than $4 since the start of November. Russian President Vladimir Putin last week promised “uninterrupted shipments” of fuel to India even as Moscow faces steeper sanctions over its war in Ukraine. The shipments will likely be a key point for discussions as US negotiators arrive in the South Asian nation for trade talks.
“Oversupply concerns will eventually be realized, especially as Russian oil and refined product flows eventually circumvent existing sanctions,” said Vivek Dhar, an analyst with Commonwealth Bank of Australia. That will see Brent futures fall toward $60 a barrel through 2026, he said.
Among products, gasoline futures dropped 2% in New York, after hitting the lowest level since May 2021 last week. Diesel prices also weakened in a drag on energy commodities across the board.
The focus on Moscow’s flows comes as a potential peace deal between Ukraine and Russia also remained in focus. US President Donald Trump said he was disappointed in Ukrainian President Volodymyr Zelenskiy’s handling of a US proposal to end the nearly four-year-old war.
Those tensions will be weighed against glut concerns, with higher supply from OPEC+ and producers outside the group — including the US, Brazil and Guyana — set to overwhelm tepid demand growth. The US’s Energy Information Administration, the International Energy Agency and the Organization of the Petroleum Exporting Countries will publish monthly market outlooks this week that may provide further insights.
Both WTI and Brent remain on their longest runs below their 100-day moving average in about a year. The technical gauge, which tracks underlying trend momentum, reflects the bearishness continuing to grip the market ahead of the widely telegraphed glut.
WTI for January delivery lost 2% to settle at $58.88 a barrel in New York. Brent for February settlement fell 2% to settle at $62.49 a barrel.
Source : Bloomberg.com
