- Oil trades lower as rate hike fears offset Russian output cuts
- April ’23 WTI lost 38c this morning to trade around $76/Bbl
- Russia halted pipeline oil supplies to Poland via the Druzhba pipeline on Sunday
- Oil posted a marginal decline last week after Fed minutes, and PCE data indicated concerns about inflation staying high, hinting that rate hikes might continue
- The U.S. Dollar relatively weakened to its recent highs but still remains at a seven-week high
- Although recessionary concerns continue to weigh on prices, the market continues to watch Chinese demand recovery and Russian supply risk
- Russia halts oil flow to Poland via the Druzhba pipeline (BBG)
- Lack of paperwork for shipments for the second part of February was the cause of the halt, according to Russian pipeline operator Transneft
- The cut-off of February flows came just a few days before Russia decided to cut its production by 0.5 MMBbl/d in March as retaliation for western sanctions
- Vitol says oil prices could return to triple digits in the second half of the year (BBG)
- “Demand is expected to hit record levels in the second half of the year,” said CEO Russell Hardy
- According to Vitol’s estimates, demand is set to rise by 2.2 MMBbl/d this year, and oil inventories look “reasonable” over the next few months