
Oil slips as little impact seen from EU sanctions on Russian crude
Brent crude futures dropped 19 cents, or 0.3%, to $69.09 a barrel by 1:45 p.m. EDT (1745 GMT), while U.S. West Texas Intermediate crude slipped by 11 cents, or 0.2%, to $67.23.
The European Union approved on Friday the 18th package of sanctions against Russia over itswar in Ukraine, which also targeted India's Nayara Energy, an exporter of oil products refined from Russian crude.
"The market right now thinks that supply will still make it to market in one way, shape or another, there is not too much concern," said John Kilduff, a partner at Again Capital in New York.
Kremlin spokesperson Dmitry Peskov said on Friday that Russia had built up a certain immunity to Western sanctions.
The EU sanctions followed U.S. President Donald Trump's threats last week to impose sanctions on buyers of Russian exports unless Russia agrees to a peace deal within 50 days.
ING analysts said the part of the package likely to have an effect is the EU import ban on refined products processed from Russian oil in third countries, though ING said that could prove difficult to monitor and enforce.
Curbing some of crude's losses during afternoon trade on Monday were investor concerns around diesel supplies resulting from the sanctions package, analysts said.
"As the day has gone on the diesel crack spread started to firm quite a bit, suggesting that the market cannot ignore the fact that any disruptions in Russian oil supply could tighten supplies of diesel and that seems to be giving us a bit of support today," said Phil Flynn, senior analyst with Price Futures Group.
Low-sulphur gasoil futures were trading at a $26.58 per barrel premium to Brent crude at 1:45 p.m. EDT, up around 4% on the day. If prices hold near that level, it would be the highest close since February 2024.
"We have a bit of room for error on the crude side, barrels can be shuffled around a bit but it is harder to shuffle around tight supplies of diesel," Flynn added.
Iran, another sanctioned oil producer, is due to hold nuclear talks with Britain, France and Germany in Istanbul on Friday, an Iranian foreign ministry spokesperson said on Monday. That follows warnings by the three European countries that a failure to resume negotiations would lead to international sanctions being reimposed on Iran.
In the United States, the number of operating oil rigs fell by two to 422 last week, the lowest total since September 2021, Baker Hughes said on Friday.
"Oil-focused drilling is expected to remain at subdued levels through the balance of the year," StoneX analyst Alex Hodes said in a note on Monday.
"We aren't anywhere close to prices that merit a significant pullback in investment though," Hodes added.
U.S. tariffs on EU imports are set to kick in on August 1, though U.S. Commerce Secretary Howard Lutnick said on Sunday that he was confident the United States could secure a trade deal with the bloc.
U.S. tariffs are potentially negative for oil demand and economic activity, Again Capital's Kilduff said.
Some support may come from oil inventory data if it shows tight supply, said IG market analyst Tony Sycamore.
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Reuters
5 hours ago
- Reuters
Oil gains as trade talk optimism offsets potential higher Venezuelan supply
SINGAPORE, July 25 (Reuters) - Oil prices rose on Friday as trade talk optimism supported the outlook for both the global economy and oil demand, outweighing news of the potential for more oil supply from Venezuela. Brent crude futures touched a one-week high and was up 29 cents, or 0.42%, at $69.47 a barrel as of 0310 GMT. U.S. West Texas Intermediate crude futures climbed 29 cents, or 0.44%, to $66.32. Oil, along with stock markets, gained support from the prospect of more trade deals between the U.S. and trading partners ahead of August 1, when the U.S. will impose new tariffs on goods from an array of countries. The United States announced a trade deal with Japan on Wednesday, after which two European diplomats said the European Union was moving toward a deal involving a baseline 15% U.S. tariff on EU imports plus possible exemptions. "Trade talk optimism appears to be offsetting expectations for stronger Venezuelan supply," ING analysts wrote in a client note on Friday. The U.S. is preparing to allow partners of Venezuela's state-run PDVSA ( starting with U.S. oil major Chevron (CVX.N), opens new tab, to operate with limitations in the sanctioned nation, sources said on Thursday. Venezuelan oil exports could consequently increase by a little more than 200,000 barrels per day, which would be welcome news for U.S. refiners as it would ease tightness in the heavier crude market, ING analysts wrote. So far this week, Brent has gained 0.4% and WTI has fallen 1.4%. Both contracts advanced around 1% on Thursday driven by reports of cuts to Russian gasoline exports. Also supporting the market were U.S. crude inventory draws. U.S. Energy Information Administration data on Wednesday showed crude inventories fell last week by 3.2 million barrels to 419 million barrels, far more than the 1.6 million barrel draw estimated by analysts in a Reuters poll. "I am encouraged by the way crude oil held and bounced away from the $65/64 support band this week, which keeps hopes intact of a rebound back towards $70," said IG analyst Tony Sycamore, adding that next week will bring data for traders to chew over. Economic data next week from the world's biggest economies and oil consumers include factory activity in China and U.S. inflation, jobs and inventories.


Reuters
12 hours ago
- Reuters
Crude finishes with 1% gain on supply concerns and US crude draws
HOUSTON, July 24 (Reuters) - Oil prices rose 1% on Thursday as U.S. crude draws and expected cuts to Russian gasoline exports overwhelmed news that oil major Chevron (CVX.N), opens new tab will gain U.S. approval to renew production in Venezuela. Brent crude futures settled at $69.18 a barrel, up 67 cents or 0.98%. U.S. West Texas Intermediate crude futures finished at $66.03 a barrel, up 78 cents, or 1.20%. Crude fell in early afternoon trade on news that U.S. President Donald Trump's administration was preparing to allow limited oil operations in sanctioned OPEC nation Venezuela. Earlier in the session, WTI had been up more than a dollar and Brent crude came near that level. "The news about Chevron being able to go back into Venezuela and get oil going again just took the knees out of the market," said John Kilduff, partner at Again Capital LLC. Even so, Kilduff said the market did not expect the Trump administration would open up Venezuela to other U.S. oil companies. "This is a unique one-off," he added. Oil rebounded late in the session on news Russia was planning to cut gasoline exports to all but a few allies and nations like Mongolia, with which it has supply agreements. "Russia looking to cut off gasoline exports gave the market a boost," said Phil Flynn, senior analyst with Price Futures Group. "The market was looking for a reason to go higher." Also lifting futures was the previous day's report of a U.S. crude inventory draw and hopes for a trade deal between the U.S. and the European Union that would lower tariffs. U.S. Energy Information Administration data showed crude inventories fell last week by 3.2 million barrels to 419 million barrels, far exceeding analysts' expectations in a Reuters poll for a 1.6 million-barrel draw. "The U.S. crude inventory draw and the trade efforts are adding some support to prices," said Janiv Shah, an analyst at Rystad. On Wednesday, two European diplomats said the EU and the U.S. were moving toward a trade deal that could include a 15% U.S. baseline tariff on EU imports and possible exemptions. That could pave the way for another major trade agreement following a deal with Japan.


Reuters
13 hours ago
- Reuters
Oil pares gains on possible US OK for Chevron to renew Venezuelan operations
HOUSTON, July 24 (Reuters) - Oil pared gains on Thursday afternoon following a Reuters report that U.S. President Donald Trump's administration may allow Chevron to resume operations in Venezuela. Brent crude futures were up 26 cents, or 0.38%, to $68.77 a barrel by 1:14 p.m. CDT (1814 GMT). U.S. West Texas Intermediate crude futures rose 44 cents, or 0.67%, to $65.69 per barrel. Earlier in the session, WTI had been up more than a dollar and Brent crude came near that level. "The news about Chevron being able to go back into Venezuela and get oil going again just took the knees out of the market," said John Kilduff, partner at Again Capital LLC. Kilduff said the market does not expect the Trump administration will open up Venezuela to other U.S. oil companies. "This is a unique one-off," he said. Oil was stronger on news Russia was planning to cut gasoline exports to all but a few allies and nations Mongolia, with which it has supply agreements. "Russia looking to cut off gasoline exports gave the market a boost," said Phil Flynn, senior analyst with Price Futures Group. "The market was looking for a reason to go higher." Early in the session, futures gained on the previous day's report of a U.S. crude inventory draw and on hopes for a trade deal between the U.S. and the European Union that would lower tariffs. "The U.S. crude inventory draw and the trade efforts are adding some support to prices," said Janiv Shah, an analyst at Rystad. On Wednesday, two European diplomats said the EU and the U.S. were moving toward a trade deal that could include a 15% U.S. baseline tariff on EU imports and possible exemptions. This could pave the way for another major trade agreement following the Japan deal. Also on Wednesday, U.S. Energy Information Administration data showed crude inventories fell last week by 3.2 million barrels to 419 million barrels, far exceeding analysts' expectations in a Reuters poll for a 1.6 million-barrel draw. Oil prices were also supported by a suspension of Azeri crude exports from the Turkish port of Ceyhan and a brief halt to loadings at Russia's main Black Sea ports which has since been resolved. BP (BP.L), opens new tab said organic chlorides were detected in some of the oil tanks in the terminal at Ceyhan, adding that oil loading continued from some of the tanks with chloride levels assessed to be within normal specifications, while export activities via the BTC pipeline also continued. Traders will watch for further news on loadings from Ceyhan and Novorossiysk, which together make up around 2.5% of global oil supply at 2.5 million barrels per day, according to Reuters calculations based on loading data from the region. Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing further prisoner swaps, though the two sides remain far apart on ceasefire terms and a possible meeting of their leaders. "Next to watch would be the demand indicators as we are in the peak season and any upside or downside would impact refining margins," Rystad's Shah added.