- Oil has fallen for four out of five weeks in recent weeks
- Keystone pipeline closed, Russia threatens to cut production
LONDON, Dec 12 (Reuters) – Oil prices stabilized on Monday after several weeks of decline as a weaker global economy offset supply problems stemming from the closure of a key pipeline supplying the United States and Russian threats to cut production.
Brent crude futures were down 15 cents at $75.95 a barrel at 13:10 GMT. U.S. West Texas Intermediate crude was at $71.39 a barrel, up 37 cents.
Last week, Brent and WTI fell to their lowest level since December 2021 on fears that a possible global recession could impact oil demand.
China, the world’s biggest crude oil importer, continued to ease its strict zero COVID policy, although streets in the capital Beijing remained quiet and many businesses remained closed over the weekend.
On Monday, queues formed outside fever clinics in the cities of Beijing and Wuhan, where COVID first emerged three years ago.
“Oil markets are likely to remain volatile in the near term amid uncertainty over the impact on Russian production of the EU ban, headlines about China’s COVID policy and central bank moves. in the United States and Europe,” UBS analysts said in a note.
UBS said it believes Brent is likely to rally above $100 a barrel in coming months amid supply constraints and growing demand, while OPEC+ will keep supply tight.
Sunday, TC Energy of Canada (TRP.TO) said he has yet to determine the cause of the Keystone pipeline leak last week in the United States. He gave no timetable for when the pipeline would resume operations.
The 622,000 barrel per day Keystone line is a critical artery that transports heavy Canadian crude to U.S. refiners.
Russian President Vladimir Putin said on Friday that Russia could cut production and would refuse to sell oil to any country that imposed a “stupid” price cap on Russian exports.
Saudi Arabia’s energy minister also said on Sunday that price cap measures had yet to show clear results.
The number of tankers waiting to cross Istanbul’s Bosphorus strait fell on Monday, showing a slowdown in the recent traffic buildup.
“The emerging EU embargo on Russian crude…could add moderate risks to the upside of energy prices over the coming months. But supply uncertainty should ease further. by the spring of 2023, after the embargo on petroleum products (February 5),” Deutsche Bank said in a note.
Reporting by Florence Tan and Emily Chow in Singapore; Editing by Bradley Perrett, Simon Cameron-Moore and David Evans
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