- Oil recovers from its 2022 lows amid optimism about China's demand and Keystone outage
- WTI reversed some losses seen over the past four days but is still trading near YTD lows around $74/Bbl
- China announced significant revisions to its strict zero-Covid policy on Wednesday since the pandemic began
- The changes include dropping testing for domestic travelers and allowing infected individuals with mild symptoms to quarantine at home, indicating Beijing is shifting away from its zero-COVID policy
- TC Energy today announced the closure of the Keystone pipeline to examine an oil leak that occurred 20 miles outside of Steele City, Nebraska (Reuters)
- The 0.622 MMBbl/d pipeline underwent an emergency shutdown yesterday after detecting reduced pressure in the system
- TC Energy reported that crews are working to contain and recover the oil
- Russian Energy Minister Pavel Sorokin dismissed the EU-G7 price cap's effects on Russian oil production (BBG)
- “Most markets are available for our oil based on adequate market principles, while any fluctuations in oil production that may occur are not critical and will not exceed those registered in the spring,” said Sorokin today
- Sorokin's remarks coincide with plans for Moscow to stop selling crude to countries that accept the G7 price cap
- AEGIS notes that the sanctions could risk an estimated 0.5 to 1.5 MMBbl/d of Russian oil production
- The Biden administration is weighing the impacts of China's reopening and the price cap’s effects on Russian output before replenishing the SPR (BBG)
- Amos Hochstein, a senior US energy security advisor, also said that "increased production" be expected in 1Q23 and 2Q23 and noted that the administration "needs more replenishing in the SPR" in the long run
- Hochstein's remarks come as crude trades at YTD lows and close to the administration's repurchasing price range of $67/Bbl to $72/Bbl
- The price cap on Russian crude triggers an oil tanker lineup off Turkey (BBG)
- Twenty-six tankers from Kazakhstan carrying more than 23 MMBbl of oil were unable to pass Turkish waterways
- Turkey announced late last month that passing tankers would need to provide proof of insurance before being allowed to cross the straits in response to EU’s sanctions against Russia
- Traders and shipowners warned that the blockage could spike oil prices and shipping costs if the blockage isn't resolved in the next few days