Crude oil prices were a touch firmer in early trade on Wednesday, halting a slide which began after last Friday’s close. Front-month WTI hit its highest level in just over a fortnight on Friday, coming within a cent of $62.50 per barrel. This followed the announcement that the US was imposing sanctions on Russia’s two biggest operators in the oil market, Lukoil and Rosneft.
Source: TN Trader
Crude prices registered their biggest weekly gain since the summer, breaking a near-relentless selloff as traders considered the ongoing slowdown in global demand growth against an ongoing supply glut. But prices fell back this week as analysts questioned just how effective the US sanctions on Russia may be.
Adding to this uncertainty is whether India and China, Russia’s two biggest customers for its oil, are prepared to look elsewhere for supply. In the meantime, the US has said that its sanctions won’t apply to Rosneft’s German business. Last night, the American Petroleum Institute recorded a drawdown in US crude inventories for last week. This helped to support prices. The US Energy Information Administration will release its own inventory report later today.
