Brent declines on oversupply concerns
The front-month ICE Brent contract has inched $0.07/bbl lower on the day, to trade at $64.05/bbl at 09.00 GMT.
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Upward pressure:
Brent’s price has felt some upward pressure following renewed pressure on Russian oil exports.
The European Union (EU) has adopted a 17th sanctions package against Moscow, targeting its shadow fleet of nearly 200 oil tankers carrying Russian crude oil.
“The EU has listed 189 additional vessels that are part of the shadow fleet of oil tankers or contribute to Russia's energy revenues, bringing the total number of listings to 342,” the European Commission said in a statement.
“The EU is throwing around the idea of lowering the G7 price cap for Russian oil,” two analysts from ING Bank said.
Meanwhile, finance ministers and central bankers of the G7 group of developed nations condemned Russia’s aggression in Ukraine at a summit in Canada yesterday. They threatened to “maximize pressure such as further ramping up sanctions” if no progress is made towards a peace deal with Ukraine.
Downward pressure:
Brent has slipped following reports of oversupply in the global oil market.
The Saudi Arabia-led OPEC+ alliance is considering a third consecutive output hike of 411,000 b/d in July, according to a Bloomberg report.
“What it does indicate is that leaders, including Saudi Arabia, are serious in their efforts to force members, who are overproducing against their quotas, to rein in supply,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.
Oil market analysts currently await the 1 June OPEC+ meeting, where the group is expected to finalise output levels for July.
“The oil market is under renewed pressure as noise builds around what OPEC+ will do with their July output levels,” ING Bank analysts said.
By Aparupa Mazumder
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