Oil Posts Second Weekly Gain As Russia Warns of Output Cut

Credits: Zbynek Burival/Unsplash
  • Russia may cut crude production by as much as 700,000 barrels
  • 1.8 million barrels of refinery capacity halted in Texas

Oil rallied to a three-week high and clinched a second straight weekly gain after Russia warned it may cut output by as much as 700,000 barrels a day in response to sanctions on the nation’s crude, reports Gulf News.

Trading volumes dwindle

With trading volumes dwindling heading into the Christmas holiday, Russia’s threat outweighed the impacts of a winter freeze sweeping across the US. The cold has halted one-third of refining capacity on the Texas Gulf Coast and as much as 350,000 barrels a day of crude output in North Dakota.

Gasoline futures also rose to the highest in three weeks following the refinery outages, though supply is in good shape: Gulf Coast gasoline stockpiles are at a record high for this time of year, and diesel inventories are above normal as well.

Crude is still on track for a modest yearly gain after a volatile year where Russia’s attack on Ukraine upended oil markets. The invasion led Group of Seven countries to impose a $60 a barrel price cap on Russian crude to reduce the Kremlin’s income while keeping exports on the market.

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Source: Gulf News