The price of oil is shifting as investors evaluate a commitment by the Group of Seven most industrialised nations to block Russian crude imports against Saudi Arabia’s official price decrease and the impact of China’s energy-sapping lockdowns.
West Texas Intermediate or WTI for June delivery added 0.3% to $110.10 a barrel on the New York Mercantile Exchange at 11:07 a.m. in Singapore. While, the Brent for July settlement rose 0.4% to $112.79 a barrel on the ICE Futures Europe exchange.
On Sunday, after a video conference with Ukraine President Volodymyr Zelenskiy, the leaders of the most industrialised nations made the pledge in reaction to President Vladimir Putin’s conflict in Ukraine. The European Union, or EU, has yet to agree on a comparable proposal because certain countries disapprove.
Meanwhile, Saudi Arabia has lowered rates for Asian consumers as China’s coronavirus outbreak has slowed demand. For the first time in four months, Saudi Aramco slashed pricing, reducing its crucial Arab Light grade for next month’s flows to $4.40 a barrel over the benchmark it uses.
Crude has had a tumultuous year, as Russia’s invasion of its smaller neighbour threw global commodities markets into disarray and drove up prices. In reaction to the onslaught, the US and the UK have already moved to prohibit Russian fuel imports, but the G-7’s weekend vow will put even more pressure on Moscow. Raw material prices have been swayed as major central banks, particularly the Federal Reserve of the United States, tighten policies to combat a significant spike in inflation.
“Expect a price drop as the EU tries to reach consensus on a Russian oil embargo,” said Vandana Hari, founder of oil research firm Vanda Insights. The fall may be limited, though, as the bloc continues to work toward a consensus, putting the market on edge.”
The G-7 leaders made their commitment to phasing out Russian oil on the eve of Russia’s May 9 Victory Day, which commemorates the nation’s role in the triumph over Nazi Germany in World War II. The date has become a touchstone of the Kremlin’s campaign to whip up public support for the invasion.
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