19 November 2022, Saturday, 18:45 276

Oil Prices Fell To 2-Month Low Ahead Of Embargo Against Russia

Редактор: Daria Zubkova

Despite Russian President Putin's predictions that oil prices will "soar to the sky", the oil market is meeting the European oil embargo against Russia with the biggest collapse of quotations in two months, the moscowtimes informs.

The price of Brent North Sea futures fell below USD 90 per barrel for the first time since the beginning of October, and American WTI oil broke the USD 80 mark.

Since the beginning of the week, oil prices have fallen by more than 10%, despite the fact that from December 5 the European Union will refuse sea supplies from Russia, and the G7 countries will introduce a price ceiling. At the same time, the insurance of tankers carrying oil, which costs more, will be prohibited.

At the Eastern Economic Forum in October, Putin threatened that Russia would stop supplying countries that join the "ceiling" mechanism. According to the IEA's estimate, 1.4 million Russian barrels may leave the market every day - oil producers will not be able to redirect this volume to Asia.

In July, Putin predicted the fate of the gas market for the oil market, where prices jumped by hundreds of percent in the summer. But this is not happening. Brent is down by 3.14% to USD 87 a barrel, while WTI is down by 3.1% to USD 79.05. Earlier, quotations fell to USD 85.81 and USD 77.23, which are two-month lows.

"Oil demand is weakening in China, which is experiencing another wave of the pandemic with disease rates near records," said Amrita Sen, chief analyst at Energy Aspects.

"In other major economies, oil consumption remains "decent" for now, she emphasizes, but both the USA and the European Union are headed for recession, which will hit the demand for raw materials.

Russian crude is selling an average of USD 25.5 less than Brent, according to Bloomberg, with discounts widening in recent weeks after Chinese and Indian refiners cut purchases of December shipments amid fears of U.S. and EU sanctions.

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