West Texas Intermediate futures traded close to $ 112 on Tuesday. G-7 leaders have said they want ministers to urgently consider how to reduce Russian oil and gas prices, a move that comes as government figures show the Urals have risen in price relative to crude Brent. The most notable moves in recent days have been in more specialized meters on the market. A contract known as the Dated-to-Frontline swap – an indicator of strength in the North Sea core market that supports much of global crude pricing – set a record above $ 5 a barrel. The rally comes amid growing supply disruptions in Libya and Ecuador, exacerbating the continuing tightness of the market. “We are in a period of crisis, it is difficult to see any substantial easing of the price of crude,” said John Kilduff. There is a lot of power with China easing its restrictions on COVID-19 and launching its own independent refineries, “we will have another chunk of crude oil demand” as China relaxes its restrictions on COVID-19. Oil has risen about 50 percent this year, but strength in natural markets has been offset by a sharp slide in key prices in recent weeks. While fears of a slowdown in the global economy have weighed on futures, demand remains strong for now. Retail gasoline prices in the US remain near record highs, causing pain to consumers. The recovery from COVID-19 and the lack of refining capacity for fuel production continue to keep prices at record highs. The tight supply situation is revealed in the WTI-Brent spread, which increased to US $ 6.19, the highest in almost three months. “European demand will remain strong, especially as gas supplies run out, while North American demand for crude oil weakens,” said Ed Moya, senior market analyst at Oanda. Prices
WTI for August delivery rose $ 2.19 to $ 111.76 a barrel in New York. Brent for August delivery rose $ 2.89 to $ 117.98 a barrel.
Oil also rose as the wider climate was boosted by China’s move to halve the time new arrivals in isolation must spend, the biggest change in its pandemic policy to date.
Travelers to China must spend seven days in central quarantine and then monitor their health for another three days at home, according to government protocol. This compares to 14 days of quarantine in hotels in many parts of China at the moment and up to 21 days of isolation in the past. The prospect of additional supply from two of OPEC’s main producers also seems limited. French President Emmanuel Macron has told US President Joe Biden that the United Arab Emirates and Saudi Arabia are already drawing as much as they can. Macron relayed a conversation he had with UAE leader Sheikh Mohammed bin Zayed. OPEC + ministers gather on Thursday.
