Oil Steadies as Traders Weigh Russian Pipeline Halt, Stockpiles

  • In Business
  • 2022-08-10 02:08:05Z
  • By Bloomberg

(Bloomberg) -- Oil steadied as traders waited to see whether a key crude pipeline from Russia to Europe would resume flows, and assessed industry estimates that pointed to an increase in US inventories last week.

Most Read from Bloomberg

  • Trump Under Intense Legal Scrutiny After FBI Searches Mar-a-Lago

  • Trump Search Was Unprecedented, But Records Case Will Be Tough

  • UK Plans for Blackouts in January in Emergency Energy Plan

  • Russia Is Scouring the Globe for Weapons to Use Against Ukraine

  • Home Inventory Soars at Record Rate With US Buyers Pulling Back

West Texas Intermediate held above $90 after edging higher on Tuesday, when Russia's Transneft said Ukraine halted flows through the southern section of the Druzhba pipeline toward Hungary, the Czech Republic and Slovakia on Aug. 4 as sanctions blocked payment of Moscow's transit fee. Czech pipeline operator Mero CR said that it expected services to be restored within days.

Estimates from the industry-funded American Petroleum Institute showed a 2.2 million barrel increase in US crude stockpiles last week, including a build at the key storage hub at Cushing, Oklahoma, according to people familiar with the data. Official figures will follow later on Wednesday.

Crude hit a six-month low last week on signs that demand was weakening, especially for US gasoline, just as investors fretted that a global slowdown is looming. Still, plenty of bullish risks for crude remain as Russia's invasion of Ukraine drags on and sanctions against Moscow pile up. Separately, producer group OPEC+ has warned its spare capacity has sunk to extremely low levels.

"We think oil's recession-triggered downturn may have ended," said Zhou Mi, an analyst at the Chaos Research Institute in Shanghai, citing prospects for limited additional supply. For now, the Druzhba halt seems to be an issue on the Ukrainian side, not Russia's, so the impact is limited, he added.

The interruption to oil flows along part of the Druzhba network -- even if resolved in the coming days -- will add to energy concerns in Europe as the continent heads toward what could be an especially challenging winter. Russia has already clamped down on gas deliveries to the region, raising the specter of shortages and recession, and the European Union aims to halt imports of seaborne crude and fuels as it tightens sanctions against Moscow.

While oil markets remain in backwardation, a bullish pattern, key differentials have narrowed sharply, signaling an easing of tightness. Brent's prompt spread -- the widely watched gap between its two nearest contracts -- was $1.42 a barrel in backwardation, down from more than $3 a month ago.

Crude has declined in recent months as central banks including the Federal Reserve tighten monetary policy to quell the pace of price gains. A report later Wednesday is expected to show headline US consumer inflation stayed elevated in July, while the core reading quickened. In Asia, a release showed China's consumer inflation surged last month to the highest level in two years.

Oil investors are in line for a dual update on the global market outlook on Thursday. Both the Organization of Petroleum Exporting Countries, the producers' group, and the International Energy Agency, which represents key industrialized consumers, are set to issue their monthly snapshots.

Most Read from Bloomberg Businessweek

  • Amazon's Roomba Deal Is Really About Mapping Your Home

  • How Employers Benefit From Offering Unlimited Paid Time Off

  • Facebook Is Still Making Billions as Zuckerberg Hits the Panic Button

  • The Rise of the LinkedIn B2B Influencer

  • Stagflation Puts Stamp on Earnings of US Consumer Giants

©2022 Bloomberg L.P.


More Related News

Gold Set for Largest Weekly Gain Since March as Jobs Data Loom
Gold Set for Largest Weekly Gain Since March as Jobs Data Loom

(Bloomberg) -- Gold headed for the largest weekly gain since March ahead of key US jobs data that will shape expectations about how much more tightening is...

Judge to Trump Lawyer in Ex-Aide Deposition:
Judge to Trump Lawyer in Ex-Aide Deposition: 'Stop Wasting Time'
  • World
  • 2022-10-07 01:45:02Z

(Bloomberg) -- Former President Donald Trump's lawyers were told by a federal judge to "stop wasting time" after they tried halting the deposition of former ...

Day Traders Are Turning Super Bearish in Korea, Four Charts Show
Day Traders Are Turning Super Bearish in Korea, Four Charts Show

(Bloomberg) -- South Korea has been one of the world's worst-performing equity markets this year and its decline has been aggravated by the extreme...

Crypto Hacked Again in $100 Million Theft of Binance Coin
Crypto Hacked Again in $100 Million Theft of Binance Coin

(Bloomberg) -- An already bad year for cryptocurrencies took another turn for the worse after roughly $100 million of Binance Coin was stolen in what appears...

Biden invokes Cuban Missile Crisis in addressing Russia
Biden invokes Cuban Missile Crisis in addressing Russia's nuclear threats
  • World
  • 2022-10-07 01:33:15Z

The president said that, amid the country's attempted annexation of Ukrainian territory, President Vladimir Putin's threats were not merely idle.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business