Oil prices are weak Thursday morning after a sharp decline in trading on Wednesday amid talks on the introduction of a ceiling on Russian oil prices.
The price of January Brent futures on London’s ICE Futures Exchange stood at $85.12 a barrel by 7:12 a.m. CST, down $0.29 (0.34%) from the previous session’s closing price. At the close of trading on Wednesday these contracts have fallen by $2.95 (3.3%) to $85.41 per barrel.
The price of WTI futures for January at electronic trades of the New York Mercantile Exchange (NYMEX) makes $77.73 per barrel by that time, which is $0.21 (0.27%) lower than the final value of the previous session. The contract fell by $3.01 (3.7%) to $77.94 a barrel at the end of last session.
The U.S. and allied countries are planning to agree on a price ceiling on Russian oil of no more than $70 per barrel, The Wall Street Journal earlier reported, citing sources.
It was expected that a decision could be made as early as Wednesday, but EU countries have so far failed to come to a unified position, Bloomberg reported. According to the agency, the European Commission offered a $65 a barrel level, but Poland and the Baltic states found it too high. In turn, countries with a powerful shipping industry – Greece and Malta – do not want prices below $70.
“The higher the price ceiling, the easier it will be for buyers from India and China to get access to transport, insurance and other services from G7 countries,” Mizuho analysts wrote.
Also, market participants assessed the official data on energy stocks in the United States, which pointed to a sharp decline in oil reserves and an increase in petroleum products stocks last week.
Commercial oil inventories in the U.S. last week decreased by 3.69 million barrels, data from the weekly report of the U.S. Department of Energy showed. Experts had expected a decline of 2.61 million barrels.
Meanwhile, marketable gasoline inventories rose by 3.06 million barrels and distillates by 1.72 million barrels. Analysts were expecting the growth of the first indicator by 1.15 million barrels, the second – by 650 thousand barrels.
