U.S. officials may seek a price cap for Russian oil exports above $60/bbl, a higher level than previously planned, Bloomberg reported Friday.
A higher cap would seem to contradict the primary goal of the plan – to deprive Russia of oil revenues that help finance its war in Ukraine – but it would align with another goal of keeping Russian oil on the market with a price high enough to cover production costs and encourage continued output.
Vladimir Putin has said Russia would not sell to countries that are backing the cap, which has been criticized by industry insiders and even some U.S. allies as unworkable.
Many details remain unresolved as officials from countries participating in the plan meet this month to determine cap levels for crude and some refined products.
Oil futures rose Friday and eked out a modest gain for the week, as traders juggled fears of a global economic slowdown against signs of oil market tightness.
Front-month Nymex crude (CL1:COM) for December delivery settled +0.5% this week to $85.05/bbl, and December Brent crude (CO1:COM) closed +2% at $93.50/bbl.
Meanwhile, U.S. natural gas pulled back sharply this week as domestic supplies are rising rapidly, warm weather patterns are forecast in normally wintry parts of the country, and concerns about broader market tightness due to Russia’s curtailment of gas flows to Europe have faded for now.
Front-month Nymex natural gas (NG1:COM) for November delivery fell for the ninth consecutive week, -23.1% to $4.959/MMBtu.
Energy (NYSEARCA:XLE) topped this week’s S&P sector standings, +8.2%, marked by a record high for Exxon Mobil.
Top 10 gainers in energy and natural resources during the past 5 days: (LFG) +52.9%, (KLXE) +37.5%, (CLNE) +36.1%, (OPAL) +35.5%, (PARR) +25.5%, (MNTK) +25%, (TUSK) +23.6%, (RIG) +23.3%, (PLL) +22.5%, (PUMP) +22.5%.
Top 5 decliners in energy and natural resources during the past 5 days: (NRGV) -19.2%, (AMPS) -14.5%, (IREN) -11.2%, (MTR) -10.4%, (PEGY) -10%.
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