Oil becomes cheaper and rises in price again on Tuesday. Talk about a possible reduction in OPEC + production influences the decisions of investors and thus weighs on quotes.
Saudi Energy Minister Prince Abdulaziz bin Salman said earlier this week that the oil market is increasingly moving away from its fundamental factors, and high volatility and extremely low liquidity are to blame. He also noted that in the current situation, OPEC + can use all the privileges it has to regulate the market. For example, the alliance can at any time announce a reduction in production, especially since it has already used this measure in the recent past - in the crisis years of 2020 and 2021.
Against the backdrop of these reports, the cost of October futures for Brent oil on the London ICE Futures exchange in the morning hours of the European trading session fell by 0.47% to the final value of the previous trading day. The price of these contracts reached $100.54 per barrel, that is, it managed to grow by 0.32% compared to the final price on Tuesday.
Futures for WTI oil for September in electronic trading on the New York Mercantile Exchange showed a drop of 0.33% in the morning, or a level near $93.43. However, during the day, these contracts in relation to the final value of Tuesday again rose in price and even hit the level of $93.41.
Statistics on business activity (we are talking about preliminary data for August) for the EU and the US turned out to be heterogeneous, but without a significant decline, which is why the risks of an approaching global recession have receded into the background.
Data from the American Petroleum Institute (API), which was published earlier on Wednesday, showed a decrease in US oil inventories over the past week (from August 15 to 19) by 5.6 million barrels. Inventories of gasoline increased by 0.2 million barrels, and distillates - by 1.05 million. Official data on stocks from the US Department of Energy is set to be released on Wednesday. Probably, we will not see any significant differences from the figures already published, especially since the car season is already running out, which is why the consumption of petroleum products will gradually slow down.
At this time, Russia approached several Asian countries with a proposal for the possible conclusion of oil contracts with discounts of up to 30% on a long-term basis. This was reported by Bloomberg News, citing a Western official.
Probably, with these negotiations, Russia is trying to interfere with other negotiations, namely the G7 countries on creating an exception for the current EU sanctions against Russian oil. According to the plan of the Russian authorities, third parties will be able to more easily buy Russian crude oil at a low price, which will be set by Western countries. At the same time, Russia will be able to find buyers to replace the oil that is currently supplied to Europe.
Recall that the sixth package of EU anti-Russian sanctions includes a ban on oil from the Russian Federation, as well as the use by third countries of the bloc's companies for insurance and financial services. The ban will go into effect on December 5, but US officials fear that the current system will lead to a sharp increase in the cost of oil and bring huge profits to Russia.
