Logo of Phnom Penh Post newspaper Phnom Penh Post - Oil price rallies after G7 Russian exports talks

Oil price rallies after G7 Russian exports talks

Content image - Phnom Penh Post
Nhim Kosol, business manager at PP Link Securities

Oil price rallies after G7 Russian exports talks

The oil price was bullish in the prior week and continued trading at $112 per barrel after the G7 meeting discussed capacity limitation on Russian oil exports.

G7 discussions on Tuesday said China and India have had positive and productive discussions regarding a cap on Russian oil prices.

According to the Wall Street Journal, Russia, one of the world’s largest oil exporters, saw oil revenues surge in spite of moves by the West to stop buying its crude.

As a result, Moscow has shifted its shipments to developing nations like China, India, Turkey, and others, who have purchased large quantities of Russian oil at a discount of more than 20 per cent compared with Western oil prices since the war started in February.

Furthermore, Russian oil is still flowing into Europe, which has decided to ban most purchases of Russian oil but only at the end of the year. By forcing other oil exporters to compete with consistently low Russian prices, an OPEC delegate warned a price cap on Russia could harm other oil exporters.

The situation hasn’t emerged yet because these producers replaced Russian supplies in Europe or because some buyers in Asia prefer to buy non-sanctions barrels at a premium.

Oil also rose as broader sentiment was boosted by China’s move to halve the amount of time new arrivals must spend in isolation, the biggest shift yet in its Covid-19 policy, Bloomberg reported.

Travellers to China must spend seven days in centralised quarantine, then monitor their health for another three days at home, according to a government protocol. That compares with 14 days of hotel quarantine in many parts of China currently, and as many as 21 days of isolation in the past, the business media outlet added.

Investing.com, citing Reuters, reported Hiroyuki Kikukawa, general manager of research at Nissan, as saying: “Investors made position adjustments, but remained bullish on expectations that Saudi Arabia and the UAE would not be able to raise output significantly to meet recovering demand, driven by a pick-up in jet fuels.”

Despite lost Russian supplies and weak output from other OPEC member nations, Saudi Arabia and the UAE have been viewed as the only two members of the organisation with spare capacity. Nevertheless, UAE Energy Minister Suhail al-Mazrouei said on Monday that the emirate is close to meeting its quota of 3,168 million barrels per day (bpd) under the agreement with OPEC and its allies, collectively known as OPEC+, the financial platform added.

For this week’s trading recommendation, oil investors should place a buy order at $110, setting a stop-loss function at $105 and a take-profit at $115.5.

Content image - Phnom Penh Post

MOST VIEWED

  • South Korea’s first lady brings hope to ill boy

    South Korea’s first lady Kim Keon-hee – wife of current president of the Republic of Korea, Yoon Suk Yeol – met with a 14-year-boy with congenital heart disease during her trip to the Kingdom for the ASEAN Summit. After their meeting it was announced that the

  • Hun Sen gets Covid, shuns G20, APEC summits

    Prime Minister Hun Sen said he has tested positive for Covid-19 in Indonesia, where he is slated to attend the G20 summit in his capacity of the ASEAN chair. In a social media post addressing the Cambodian public, he said: “Before leaving Cambodia, I always

  • Moody’s sets outlook rating to ‘negative’ for Cambodia

    US global rating agency Moody’s Investors Service Inc on November 15 announced that it downgraded Cambodia’s outlook from “stable” to “negative” and maintained its B2 local and foreign currency issuer ratings. “The negative outlook reflects a deteriorating external position as illustrated by the severe

  • Hun Sen’s Covid infection caused by ‘weakened antibody’ after summit

    Prime Minister Hun Sen said exhaustion from heavy workload before and during the recent ASEAN Summit may have led to him contracting Covid-19 due to his weakened immune system, while rejecting speculations that the infection was caused by leaders of some countries who did not

  • Korean first lady paves way for ill boy’s surgery

    A 14-year-old boy with congenital heart disease who was lucky enough to meet with South Korean first lady Kim Keon-hee may get the chance of a lifetime and receive surgery and treatment at Asan Medical Center in Seoul, South Korea. After seeing his plight, many

  • Kingdom’s rice crowned world’s No1

    Cambodia’s Phka Rumduol jasmine variety has been crowned the World’s Best Rice for the fifth time at the TRT (The Rice Trader) World Rice Conference in Phuket, Thailand on November 17, according to leaders of the Kingdom’s apex rice industry body. Phka Rumduol