Oil prices rise over likely EU-Russia energy standoff

Market


New Delhi: Global crude oil prices rose on Thursday, a day after hitting seven-month low. Prices rose amid a likely standoff between European countries and Moscow after Russian president Vladimir Putin said the country would discontinue energy exports to Europe in case it imposes price cap on supplies.

Hours after Putin’s statement, European Union on Wednesday proposed a price cap on gas from Russia, triggering concerns among investors over Putin’s response.

Russia’s state-owned Gazprom has already halted gas supplies through Nordstream 1.

Around 11.35 am, the November Brent contract on the Intercontinental Exchange traded at $88.79 per barrel, up 0.9% from its previous close. The October contract of West Texas Intermediate (WTI) on the NYMEX was at $82.74 a barrel, up 0.98%.

The US Energy Information Administration has raised its outlook for global oil demand and lowered forecast for US supplies, which also supported prices, analysts said.

Sriram Iyer, senior research analyst at Reliance Securities, said, “Crude prices steadied this Thursday morning, but upside could remain capped as inventories rise.”

On Wednesday, oil prices had slumped due to weak Chinese trade data and reimposition of lockdowns in China amid rising Covid-19 cases.

Rahul Kalantri, vice president for commodities at Mehta Equities Ltd., said, “Oil prices settled sharply lower on Wednesday, slumping below levels seen prior to Russia’s invasion of Ukraine as downbeat Chinese trade data fed investor worries about recession risks.”

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