Brent declines following bearish EIA stocks report
The front-month ICE Brent contract has dropped by $1.93/bbl on the day, to trade at $60.37/bbl at 09.00 GMT.
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Upward pressure:
The UK has announced fresh sanctions on Russia’s energy industry this week. This news has added some upward pressure on Brent crude’s price.
London has imposed sanctions on Russia’s two largest oil companies – Lukoil and Rosneft, as well as 44 shadow fleet vessels.
Both companies “together export 3.1 million barrels of oil per day,” UK’s Foreign, Commonwealth & Development Office said in a statement.
Rosneft alone is responsible for 6% of global and nearly half of all Russian oil production, according to the statement.
“Pressure has been building on Russia’s energy sector in a bid to curb petrodollars to the Kremlin and its ability to finance its war with Ukraine,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.
Downward pressure:
The US Energy Information Administration (EIA) reported a decline in US crude stocks yesterday. This has moved Brent’s price lower, according to analysts.
Commercial US crude oil inventories have gained by 3.5 million bbls to 424 million bbls for the week ending 10 October, according to data from the EIA.
A rise in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.
“Oil prices were approaching a third consecutive weekly decline… following a bearish US oil inventory report,” two analysts from ING Bank said.
By Aparupa Mazumder
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