A Price Cap On Russian Oil Could Cause A Supply Catastrophe
If Russia refuses to use any maritime services associated with G7 countries, "Russian oil will have to sail on non-Western tankers - and there aren't enough vessels to handle Russia's millions of barrels," they argue.
"The result: less oil, higher prices, and less pain for Russia."
Oil Prices Are On Track For A Third Consecutive Week Of Losses By Irina Slav - Sep 16, 2022, 1:15 AM CDT Oil prices are on track to post another weekly loss as demand concerns continue to dominate the narrative. Recession fears continue to be the main factor weighing on oil prices, although a strong dollar also made oil less affordable for buyers. The EU embargo on Russian crude oil is set to come into effect in just three months and the fuels embargo in 5, both of which will push oil prices higher. Join Our Community Crude oil is about to book its third consecutive week of losses despite several spikes as worry about demand remains stronger than worry about supply.
A strong dollar also pressured oil prices as it made the commodity less affordable for buyers in the dollar-dominated oil market.
At the time of writing, Brent crude was trading at $91.24 per barrel, with West Texas Intermediate at $85.39 per barrel.
Recession fears, however, remain the biggest reason behind the downward trend. The World Bank on Thursday warned that the risk of a global recession had risen recently, noting the rush by central banks to raise interest rates. According to the WB, if the rate hikes were done too fast, this would push the global economy into a slowdown.
“Central banks around the world have been raising interest rates this year with a degree of synchronicity not seen over the past five decades — a trend that is likely to continue well into next year,” the World Bank said.
“Global growth is slowing sharply, with further slowing likely as more countries fall into recession. My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies,” the WB’s president, David Malpass commented.
A recession would damage oil demand just as it would damage pretty much everything else as well, which would help tame inflation but at a very high cost. Alternatives, however, are scarce. The European Union has reiterated its dedication to sanctions on Russia, with an embargo on Russian crude set to come into effect in three months and an embargo on fuels coming into effect in five.
This is bound to affect prices for both crude and fuels, especially diesel as global diesel stocks are tighter than usual at the moment. Until the embargos come into effect, however, the downward pressure on prices will remain substantial, keeping a lid on benchmarks.
Countries in the northern hemisphere are expected to consume more natural gas this coming winter, let us see how it is going to affect the oil price as well.
LONDON : Saudi Arabia and Russia, the de facto leaders of the OPEC+ oil producer group, see US$100 a barrel as a fair price that the global economy can absorb, sources familiar with government thinking in the two countries told Reuters.
The Organization of the Petroleum Exporting Countries, Russia and other allies, known as OPEC+, pumps more than 40per cent of the 100 million barrels per day of global output. The group has a powerful influence on global fuel prices through its supply policy.
Sure Bob, Hibiscus is certainly in my buy list. Others in my buy/hold lists are selected plantations and energy stocks because crude palm oil price usually moves in the same direction with oil.
Because the great democracy of EU and defender of open and free market economy is now preaching socialism. No incentive for oil companies to earn more so might as well take a long winter holiday.
The EU executive plans to raise about €140bn (£121bn) by imposing windfall taxes on energy companies’ “abnormally high profits” and redirecting proceeds to households and businesses struggling with soaring bills.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
BobAxelrod
8,255 posts
Posted by BobAxelrod > 2022-09-16 11:53 |
Post removed.Why?