Oil prices jumped more than 2% on Friday, heading for weekly gains, as Moscow announced plans to reduce crude production next month in response to Western price caps.
Brent crude futures were trading 2% higher to $86.21 a barrel while US West Texas Intermediate (WTI) futures were up 2% at $79.63. Both contracts are on course for weekly gains of around 10%.
Russia will voluntarily reduce oil production in March by 500,000 barrels per day as it halts sales to buyers complying with a Western-imposed price cap, Russian Deputy Prime Minister Aleksandr Novak announced on Friday.
Novak said the move should help restore market relations shattered by the price ceiling, which he branded “illegal.”
“Russia believes that the mechanism of price caps on Russian oil and petroleum products is an intervention in market relations and an extension of destructive energy policies of the collective West,” the deputy PM said in a statement.
The EU and the G7 nations introduced a price cap on Russian supplies on February 5, setting a limit of $100 per barrel for diesel, jet fuel and gasoline coming from Russia, and a $45 per barrel for other oil products that trade below the crude price, such as fuel oil used in industry. Fuel exports priced over these limits will be barred from insurance and shipping services from companies located in Western countries. The caps follow a previously introduced $60-per-barrel price ceiling on Russian crude oil.
Western Sanctions on Russian Oil come into Force. No Selling to EU, Looming High Gasoline Price
Russia has repeatedly warned of potential output cuts since the EU and G7 began discussing capping the price of Russian exports. Economists say the production reduction, which is the equivalent of about 5% of January’s output, may trigger volatility on the oil market, which has taken in its stride the EU ban on seaborne imports of Russian oil.
Russia is currently able to sell “all volumes of oil produced” to foreign markets, Novak said, adding that “we will act based on how the market situation is developing,” when making further decisions.
OPEC Oil Production Cut Reopens U.S. Rift with Saudi Leader. The Soufan Center Warning
There are concerns that Moscow’s decision will deepen the 2 million barrel-a-day supply curbs announced late last year by OPEC+, which Russia leads along with Saudi Arabia.
An analyst at UBS Group, Giovanni Staunovo, told Bloomberg that in the short term there is nobody to fill the supply gap created by the Russian cuts.
Crude prices jumped on the news, with the international benchmark Brent rising more than 2% to $86.60 a barrel as 13:00 GMT on Friday.
by Russia Today
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The sanctions ‘essentially make it illegal, to inshure or ship RU Crude that is priced over 60$ a barrel.
The russian published target cut was for 500K 2 700K/ barrel… this amounted to a 7% closure of existing well production by gazprom..
toss N a leaky gas line.. and just about EVERYTHING thatis dependent on the ethylene oxide process to generate chemical intermediated – (say plastics) derivatives.. is doomed to shortages..
here in the states we use natural gas and the process is called OCSF – organic chemical synthetic processses… the big player in canada is Pembia Pipeline who use LNG.. thats why they are hot in europe for LNG.. thei Gazprom facilites were set up for methane on spindel gass mixed in during transmissions to refiners or storage (thats what them bag tanks are for on the repumping stations).. i.e,barrel equivalent liquids that come out of fraked and deep Nat Gass wells over 10K feet – piped stright into the refinery // 2-gasoline…
the europeans are FOS if they are ribaring the publiuc tht they intend to use LNG, for home heating fuel..
–>>> here in the US e should start to see oil trader activity on a 0.2% to 0.40% daily creep going into summer.. gonna hurt w a 1000 cuts of sabatoge 4 a planned depression..
they are some really nasty bastards
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