FAST FIVE: Oil Prices Slide After EU Leaders Pitch Lower Russian Price Cap
“A $65-$70 price cap on Russian oil would not mean that much considering the discount Urals is currently selling at,” said Ole Hansen, head of commodities strategy at Saxo Bank.
Amid a US-holiday-week-driven illiquid market, crude prices tumbled with WTI falling back to a $78 handle (holding around the pre-OPEC-production-hike rumor plunge).
Ironically, as Bloomberg's Javier Blas reports, “Just days before the US and Europe impose fresh sanctions on Russian energy – supposedly the strongest thus far – Moscow has lifted its oil output to the highest level since its invasion of Ukraine.” It seems European buyers are desperate to fund Putin's war before the sanctions hit.
Mind we actually do not plan to drink any beer there.
In their efforts to punish Russia and make this scheme as bearish as possible for oil prices, they will inevitably drive the price dramatically higher as Russia pulls its exports from any nations that agree with the price cap (as they have explicitly warned).