Oil prices advance on expected decline in Russian exports

Oil prices rose today, Friday, amid expectations of a decrease in Russian crude exports from the Baltic region during the current month, which calms fears that a severe winter storm in the United States will lead to eliminating the growth in fuel demand during the holiday season.

By 0148 GMT, Brent crude rose 88 cents, or 1.1 percent, to $ 81.86 a barrel. US West Texas Intermediate crude rose 92 cents, or 1.2 percent, to $78.41 a barrel, according to Reuters.

Russia’s exports of Baltic oil may decline 20 percent in December compared to the previous month after the European Union and the Group of Seven countries imposed sanctions and a ceiling on Russian crude prices, according to dealers and Reuters accounts.

“Crude prices are higher as energy traders focus on Moscow’s response to the cap on Russian oil prices without focusing too much on canceling thousands of flights that will disrupt holiday travel,” said Edward Moya, an analyst at OANDA.

It was decided to cancel more than 4,400 flights in the United States over two days due to the winter storm, in conjunction with the holiday travel season, which some expect to be the busiest ever.

The snow storm may change the plans of car owners to travel in it during the Christmas and New Year holidays, which limits the consumption of gasoline.

However, demand for heating oil may rise as severe weather is expected to cause power outages.

“The snowstorm will disappoint many travelers, but it shows that we are approaching normal travel behaviour,” Moya said.

Brent and US crude are heading for a second weekly gain, supported by expectations of a recovery in oil demand in China, the second largest consumer in the world.

However, the increase in Covid-19 infections in mainland China, concerns about the new hike in interest rates in the world, and the recession that limits fuel consumption are all factors that have curbed the gains in oil prices.

“Optimism remains strong that the reopening (in China) will continue and eventually lead to an increase in demand,” Moya said.