Russian oil exceeds the G7 price cap designed to deprive Moscow of revenue.
Inputs that matter: OilPrice.com reports, "The cap requires that any Western company involved in transporting Russian oil receives a so-called attestation, a document vouching that the cargo cost $60 a barrel or less."
- "The country's flagship Urals grade is fetching about $75 a barrel when it leaves ports in the Baltic Sea and Black Sea."
- The U.S. plans to continue the enforcement of the cap by sanctioning vessels operating in the shadow fleet but will not do so in response to any specific market moves.
- A European Commission spokesperson said the bloc is aware of the risk of the price cap being dodged and is committed to steps that deprive Russia of revenue while simultaneously "supporting global energy market stability."
The opportunity: "We think oil into the summer months will kind of top out at around $95+ a barrel," Bank of America head of global commodities Francisco Blanch told Yahoo Finance on Wednesday.
- "Crude prices have pushed higher in recent months amid production cuts by oil alliance OPEC+, attacks on Russian refineries, and escalating tensions in the Middle East, including cargo interruptions along the Red Sea region."
- Blanch and other analysts believe OPEC will step in with spare capacity if prices get too high to prevent the loss of market share.
Zoom in: Brazilian oil giant Petrobras has discovered oil in the deep waters of the Potiguar basin, which is located in the country's environmentally sensitive northern equatorial margin.
- A significant breakthrough occurred in Namibia's energy sector in early 2022 with Shell Plc. (NYSE:SHEL) and TotalEnergies (NYSE:TTE) finding oil in the Graff and Venus blocks. This oilfield has the potential to become the largest-ever discovery in Sub-Saharan Africa.
Between the lines: Reuters reports, "Oil prices settled up $1 on Wednesday after three sons of a Hamas leader were killed in an Israeli airstrike in the Gaza Strip, feeding worries that ceasefire talks might stall."
- "The oil market has been and continues to be very reactive to news out of Gaza," said John Kilduff, partner at Again Capital LLC in New York.
Follow the money: Analysts at S&P Global Commodity Insights have predicted that global crude demand will increase by 1.4 mb/d in the current year.
- Former White House advisor Bob McNally believes $100 oil is "entirely real."
- MarketWatch reports, "Oil appears to play a major role in this week's rise of the benchmark 10-year Treasury yield."
- Federal Reserve Bank Chair Jerome Powell expressed concern about inflation with the rising oil price and is expected to forgo the June rate cuts.
- Seeking Alpha explains that renewable energy is capital intensive, and as interest rates soar, those funding these projects look for alternatives with faster return on investment.
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Read More
- https://gcaptain.com/russian-oil-is-once-again-trading-far-above-the-g-7s-price-cap-everywhere/
- https://finance.yahoo.com/news/oil-will-top-out-at-95-a-barrel-going-into-summer-months-says-bofa-analyst-180420303.html
- https://www.upstreamonline.com/exploration/petrobras-makes-oil-discovery-in-brazil-s-northern-equatorial-margin/2-1-1624039
- https://www.reuters.com/business/energy/oil-steady-us-crude-stock-build-offsets-middle-east-uncertainty-2024-04-10/
- https://oilprice.com/Energy/Energy-General/Tanker-Markets-Set-to-Soar-As-Final-Frontiers-Heat-Up.htm
- https://banananomics.co/lazy_oil_and_stubborn_inflation
- https://banananomics.co/interest_rates_expand_fossil_fuel_consumption