- Oil extends gains on Thursday morning following several headlines
- WTI rose by $1.64 to trade above $82/Bbl
- China might be starting to soften its Covid-zero policy following protests over mobility curbs
- The nation adjusted Covid-19 rules in two major cities, Guangzhou and Zhengzhou, replacing broad lockdowns with more targeted limitations
- The market awaits the EU’s decision on the Russian price cap (Dec 5) and the production decision from OPEC+ (Dec 4)
- OPEC and its allies are expected to hold production flat, according to WSJ
- EU nations are mulling a price-cap level of $60/Bbl on Russian crude (BBG)
- The talks are still ongoing, and all members of both G7 and EU groups need to agree for the cap to go into effect
- The price level needs to be attractive to Kremlin for it to work and secure the flows
- Russian Foreign Minister Lavrov reiterated that Russia wouldn’t sell oil to those who participate in the price-cap mechanism (BBG)
- Lavrov stated in an online briefing that Russia would deal with its partners "directly" and doesn't care what level is decided for the price cap on its crude
- He added, “Whenever we negotiate with China, India, Turkey, and other major buyers, there is always an element of balance of interests,” including on prices, “but that should be decided on mutual basis between a producer and a consumer”
- Additionally, Russia's crude output increased to an eight-month high of 10.9 MMBbl/d (Up 1.4% from October) ahead of sanctions taking effect on December 5, according to BBG calculations
- Calculations also indicated that domestic refineries in the nation processed crude at a rate of 5.8 MMBbl/d, an increase of 2.7%
- White House is considering further oil and fuel releases this winter (CNBC)
- According to four unidentified sources cited by CNBC, the Biden administration may release additional volumes of crude oil and heating oil this winter in case of a supply shortage
- The US has 1 MMBbl of heating oil in storage. The White House might ask Congress to double that limit and build new storage facilities, according to CNBC
- US crude inventories fell by 12.6 MMBbl last week, even more than expected, representing the biggest decline since June 2019, according to EIA data
- The draw coincided with US exports of crude and refined products rising to a record of nearly 11.8 MMBbl/d