- West Texas Intermediate was 2.5% higher Tuesday morning as traders weighed multiple competing market factors
- Despite both uncertainty and competing bullish and bearish variables, oil market volatility is falling
- Brent crude is set to finish February with the smallest monthly range since June 2021
- Bullish pressure is emerging as India, one of the Kremlin’s crude lifelines is experiencing increasing pressure from financiers wary of breaching Western sanctions (BBG)
- Downstream and banking execs are now needing to prove Russian imports comply with a $60/Bbl price cap
- Indian executives said refiners are scrambling, and the added scrutiny could slow down the pace of Russian imports
- AEGIS notes that India has been a major outlet for Russian crude exports following sanctions imposed by G7 countries
- The oil market’s most binding constraint is from refined oil products and waterborne transport rather than well-head production, according to Goldman Sachs (Bloomberg)
- Oil products are displaying higher implied volatility than crude
- The change in Russian crude flows has helped balloon oil on the water; now more than 100 MMBbl y-o-y