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Oil heads for the largest weekly decline in three months
- WTI lost 10c this morning to trade around $68/Bbl but is $8/Bbl, or 10% lower for the week
- Crude prices plummeted to their lowest levels in more than a year this week following the banking turmoil
- On Wednesday, Prompt WTI and Brent reached their respective lows of $65.65/Bbl and $71.67/Bbl before recovering some of their losses on Thursday
- Crude cut some of its losses as the U.S. dollar weakened, and equities rose earlier after banks, including Credit Suisse and First Republic Bank, received cash deposits from larger banks
- The market is also expecting an OPEC+ response following yesterday's meeting between Saudi Arabian and Russian officials to " promote market balance and stability"
- Additionally, the next FOMC meeting is scheduled for March 21 and 22
- U.S. won't rush to fill petroleum reserve, says top Biden adviser (BBG)
- Amos Hochstein, the Special Presidential Coordinator for Global Infrastructure and Energy Security, said yesterday that despite the recent drop in prices, the U.S. remains committed to refilling the SPR but will not rush to do so
- The U.S. should " wait and see how this crisis right now impacts the oil and industry, production and what the profile is," added Hochstein
- The SPR is currently at 371.6 MMBbl, the lowest level since the 1980s, as a result of the 180 MMBbl release last year to tame gasoline prices
- The Biden administration had previously laid out a plan to refill the SPR at prices around $70/Bbl
- Saudi Arabia and Russia meet to discuss market stability in Riyadh (BBG)
- Saudi energy minister Prince Abdulaziz bin Salman met with Russian deputy prime minister Alexander Novak in Riyadh yesterday amid this week’s crude sell-off to discuss global oil markets
- The two discussed “oil markets and efforts of the OPEC+ group to promote market balance and stability” and “stressed their countries’ commitment to the decision made by OPEC+ late October to reduce production by 2 MMBbl/d until the end of 2023” according to Saudi Arabia’s state news agency
- G7 rejects lowering price cap for Russian oil (WSJ, BBG)
- Despite the recent drop in oil prices and requests from several European states to lower the cap, the G7 intends to maintain its $60/Bbl price cap on Russian oil exports, according to a WSJ
- According to people familiar with the matter, Biden briefed European Commission President Ursula von der Leyen last week that there is no intention of adjusting the sanctions on Russia's crude oil
- Bloomberg reported on Tuesday that Estonia, Lithuania, and Poland are recommending lowering the cap to $51.45, which would be 5% less than market prices for Russian oil
- According to IEA’s February Monthly report, Russia's average export price for crude oil was $52.48/Bbl on a "free on board" basis