Tausi Insider

Oil prices settled around $3 lower on Monday, dragged down by a firmer U.S. dollar while surging coronavirus cases in China dashed hopes of a swift reopening of the economy for the world’s biggest crude importer. Brent crude futures settled down $2.85, or 3%, at $93.14 a barrel after gaining 1.1% on Friday. WTI crude futures settled down $3.09, or 3.47%, to $85.87 after advancing 2.9% on Friday. On Friday, commodities prices rallied after China’s National Health Commission adjusted its COVID-19 prevention and control measures to shorten quarantine times for close contacts of cases and inbound travellers. But COVID-19 cases climbed in China over the weekend, with Beijing and other big cities on Monday reporting record infections. “The surge in COVID cases will only lead to more lockdowns in the near term … for now China is not a source of bullish support for the petroleum complex,” said John Kilduff, partner at Again Capital LLC in New York. The U.S. dollar also rose against the euro ...

Minister of Environment and Climate Change Steven Guilbeault takes part in a news conference in Ottawa, on Sept. 15. Adrian Wyld/The Canadian Press Canada’s Environment Minister said he sees at least one advantage of using an emissions cap over a pricing system to bring down the oil and gas industry’s burgeoning output of greenhouse gas. In an interview on Monday with Tausi Insider at the COP27 climate conference in Egypt, Steven Guilbeault, who has been Minister of Environment and Climate Change for a year, said “one of the advantages of a cap is emissions reduction certainty,” that is, a cap would allow the government to predict with some degree of accuracy that Canada’s emissions targets would be met. Canada is struggling to reduce its carbon output by at least 40 per cent by 2030 and achieve net-zero emissions by 2050. The government wants the oil and gas industry to cut its emissions by 42 per cent from 2019′s levels by 2030. A modified carbon pricing system is the alternative t...

EU energy ministers meet in Brussels on Thursday to approve the latest set of emergency measures to mitigate an energy crisis, but the plans risk being eclipsed by disagreements over whether and how to cap gas prices. On the table are new draft laws to speed up permitting procedures for renewable energy sources, and to launch joint gas purchases for the 27 EU countries. Poland, Belgium, Italy and Greece threatened to block these if the package does not contain a gas price cap as well. A small but powerful camp led by Germany is opposed to a cap, however, saying that would prompt suppliers to sell elsewhere. Europex, the association of European energy exchanges, was among market participants to criticize plans for such an intervention. As temperatures drop on the continent ahead of the winter, the ministers will have another go at the matter that has divided the bloc for many months. The European Commission, the EU executive, has so far proposed applying the cap to month-ahead derivat...

Benchmark Brent oil edged lower on Thursday while West Texas Intermediate (WTI) crude held steady, hovering in sight of two-month lows as the level of a proposed G7 cap on the price of Russian oil raised doubts about how much it would limit supply. A bigger-than-expected build in U.S. gasoline inventories and widening COVID-19 controls in China also added downward pressure on crude prices. Brent crude futures were down 29 cents, or 0.3%, to $85.12 a barrel by 15.15 p.m. ET (2015 GMT), while U.S. WTI crude futures rose 2 cents, to $77.96. Trading volumes were thin because of the Thanksgiving holiday in the United States. Both benchmarks plunged more than 3% on Wednesday on news the planned price cap on Russian oil could be above the current market level. European Union governments remained split over what level to cap Russian oil prices at to curb Moscow’s ability to pay for its war in Ukraine without causing a global oil supply shock, with more talks possible on Friday if positions c...

Belgian Minister of Energy Tinne Van der Straeten attends an EU energy ministers meeting, in Brussels, on Nov. 24. JOHANNA GERON/Reuters On winter’s doorstep, European Union nations again failed to bridge bitter disagreements over a natural gas price cap Thursday as they struggle to effectively shield 450 million citizens from massive increases in their utility bills. An emergency meeting of energy ministers only showed how the energy crisis tied to Russia’s war in Ukraine has divided the 27-nation bloc into almost irreconcilable blocs. “The discussion was quite heated, and you all know that there are very divergent views,” said Czech Industry Minister Jozef Sikela, who chaired the meeting where ministers could not agree on when and how a price cap on gas purchases should kick in. A massive August spike in natural gas prices stunned all but the wealthiest in Europe, forcing the bloc to look for a cap to contain volatile prices that are fuelling inflation. But the EU is deadlocked bet...

European Commissioner for Energy Kadri Simson speaks to reporters at the EU headquarters, in Brussels, on Nov. 24. KENZO TRIBOUILLARD/AFP/Getty Images The European Union’s energy chief on Wednesday defended the bloc’s proposal to cap gas prices and said countries will negotiate possible changes to the proposal, after a backlash from EU member states. After months of infighting among EU countries who disagree on whether to cap energy costs, the European Commission last week proposed a price cap that would kick in if the front-month Title Transfer Facility gas price exceeded 275 euros per megawatt-hour for two weeks and was 58 euros higher than a liquefied natural gas reference price for 10 days. The EU proposal came under fire from countries in favour of a gas price cap to reduce citizens’ high energy bills – with Poland’s energy minister calling the proposal “a joke” and analysts suggesting it was designed with such strict criteria that it would never be used. “This was not our aim, ...

Oil prices settled largely narrowly mixed on Thursday, retreating from an early rally built on dollar weakness and hopes for improved fuel demand in China after COVID-19 curbs were eased in two major Chinese cities. Brent Crude futures settled 9 cents lower at $86.88 a barrel. U.S. West Texas Intermediate crude futures settled at $81.22 a barrel, up 67 cents or 0.8%. Both benchmarks remain on target for their first weekly gains after three consecutive weeks of decline. On Monday, Brent touched $80.61, lowest since Jan. 4. “We came into the session bullish but we’re not going to get to $100 no matter what city reopens,” said Eli Tesfaye, senior market strategist at RJO Futures. Tesfaye said he expects oil to trade in the $70-$90 a barrel range and gradually stabilize after higher volatility in recent weeks. The shift in China’s zero-COVID strategy raised optimism about a recovery in oil demand there. The cities of Guangzhou and Chongqing announced an easing of COVID-19 curbs on Wednes...

European Union governments tentatively agreed on Thursday on a $60 a barrel price cap on Russian seaborne oil - an idea of the Group of Seven (G7) nations - with an adjustment mechanism to keep the cap at 5% below the market price, according to diplomats and a document seen by Reuters. The agreement still needs to be approved by all EU governments in a written procedure by Friday. Poland, which had pushed for the cap to be as low as possible, had as of Thursday evening not confirmed if it would support the deal, an EU diplomat said. EU countries have wrangled for days over the details of the price cap, which aims to slash Russia’s income from selling oil. The initial G7 proposal last week was for a price cap of $65-$70 per barrel with no adjustment mechanism. Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia rejected that level as not achieving the main objective of reducing Moscow’s ability to finance its war in Ukraine. “The price cap is set at $60 with...

Oil futures were broadly stable on Friday, but were poised to end the week up, ahead of a meeting by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday and an EU ban on Russian crude oil kicking in on Monday. Brent crude futures were up 14 cents, or 0.2 per cent, at $87.02 per barrel by 1008 GMT. U.S. West Texas Intermediate (WTI) crude futures inched up 5 cents, or 0.1 per cent, to $81.27 per barrel. Both Brent and WTI had dipped earlier in the session, but were on track for their first weekly gains – the biggest in two months at around 4 per cent and 6 per cent, respectively – after three consecutive weeks of decline. Sending bullish signals, China is set to announce an easing of its COVID-19 quarantine protocols within days, sources told Reuters, which would be a major shift in policy in the world’s second biggest oil consumer, though analysts warn a significant economic reopening is likely months away. Also underpinning oil prices, the U.S. dol...

The Group of Seven nations and Australia joined the European Union on Friday in adopting a $60-per-barrel price cap on Russian oil, a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine. Europe needed to set the discounted price that other nations will pay by Monday, when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect. The price cap, which was led by the G-7 wealthy democracies, aims to prevent a sudden loss of Russian oil to the world that could lead to a new surge in energy prices and further fuel inflation. U.S. Treasury Secretary Janet Yellen said in a statement that the agreement will help restrict Putin’s “primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies.” The agreement comes after a last-minute flurry of negotiations. Poland long held up an ...

Western governments are aiming to cap the price of Russia’s oil exports in an attempt to limit the fossil fuel earnings that support Moscow’s budget, its military and the invasion of Ukraine. The cap is set to take effect Monday, the same day the European Union will impose a boycott on most Russian oil – its crude that is shipped by sea. The EU tentatively agreed to a $60-per-barrel threshold Friday. The twin measures could have an uncertain effect on the price of oil as worries over lost supply through the boycott compete with fears about lower demand from a slowing global economy. Here is what to know about the price cap, the EU embargo and what they could mean for consumers and the global economy: What is the price cap and how would it work? U.S. Treasury Secretary Janet Yellen has proposed the cap with other Group of 7 allies as a way to limit Russia’s earnings while keeping Russian oil flowing to the global economy. The aim: hurt Moscow’s finances while avoiding a sharp oil pric...

The Vladimir Arsenyev tanker at the crude oil terminal Kozmino in Russia, on Aug. 12. TATIANA MEEL/Reuters The Kremlin’s ability to pay for its war in Ukraine depends largely on the sale of hydrocarbons. Oil and natural gas represent 20 per cent of Russia’s GDP and haul in almost half of its budget income. Cut that Volga-River-sized flow of cash into the Russian money vaults and President Vladimir Putin will be forced to sue for peace. Or so the theory goes. Since the start of the war in February, the West, especially the European Union, has imposed wave after wave of sanctions, embargoes and trade measures against Russia, ranging from ejecting Russian banks from the Swift global financial messaging system to virtually eliminating Russian coal from the European electricity-generation mix. The Western assault has pushed Russia into recession (though not one as deep as expected). But oil exports, the lifeblood of its economy, continues to prop up Mr. Putin’s war machine. In the first h...

Russian authorities rejected a price cap on the country’s oil set by Ukraine’s Western supporters and threatened Saturday to stop supplying the nations that endorsed it. Australia, Britain, Canada, Japan, the United States and the 27-nation European Union agreed Friday to cap what they would pay for Russian oil at $60-per-barrel. The limit is set to take effect Monday, along with an EU embargo on Russian oil shipped by sea. Kremlin spokesman Dmitry Peskov said Russia needed to analyze the situation before deciding on a specific response but that it would not accept the price ceiling. Russia’s permanent representative to international organizations in Vienna, Mikhail Ulyanov, warned that the cap’s European backers would come to rue their decision. “From this year, Europe will live without Russian oil,” Ulyanov tweeted. “Moscow has already made it clear that it will not supply oil to those countries that support anti-market price caps. Wait, very soon the EU will accuse Russia of using...

The logo of the Organization of the Petroleoum Exporting Countries (OPEC) is seen outside of OPEC's headquarters in Vienna, Austria, on March 3. Lisa Leutner /The Associated Press OPEC+ agreed to stick to its oil output targets at a meeting on Sunday as the oil markets struggle to assess the impact of a slowing Chinese economy on demand and a G7 price cap on Russian oil on supply. The decision comes two days after the Group of Seven (G7) nations agreed a price cap on Russian oil. OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the United States and other Western nations in October when it agreed to cut output by 2 million barrels per day (bpd), about 2% of world demand, from November until the end of 2023. Washington accused the group and one of its leaders, Saudi Arabia, of siding with Russia despite Moscow’s war in Ukraine. OPEC+ argued it had cut output because of a weaker economic outlook. Oil prices hav...

The Group of Seven price cap on Russian seaborne oil came into force on Monday as the West tries to limit Moscow’s ability to finance its war in Ukraine, but Russia has said it will not abide by the measure even if it has to cut production. The price cap, to be enforced by the G7, the European Union and Australia, comes on top of the EU’s embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain. It allows Russian oil to be shipped to third-party countries using G7 and EU tankers, insurance companies and credit institutions, only if the cargo is bought at or below the price cap. Because the world’s key shipping and insurance firms are based in G7 countries, the cap could make it difficult for Moscow to sell its oil for a higher price. Russia, the world’s second-largest oil exporter, said on Sunday it would not accept the cap and would not sell oil that is subject to it, even if it has to cut production. The new price cap on Russian...

Major Western measures to limit Russia’s oil profits over the war in Ukraine took effect Monday, bringing with them uncertainty about how much crude could be lost to the world and whether they will unleash the hoped-for hit to a Russian economy that has held up better than many expected under sanctions. In the most far-reaching efforts so far to target one of Moscow’s main sources of income, the European Union is banning most Russian oil and the Group of Seven democracies has imposed a price cap of US$60 per barrel on Russian exports to other countries. The impact of both measures, however, may be blunted because the world’s No. 2 oil producer has so far been able reroute much of its European seaborne shipments to China, India and Turkey, although at steep discounts, and the price cap is near what Russian oil already cost. As it stands, Russia will likely have enough money to not only fund its military but support key industries and social programs, said Chris Weafer, chief executive...

European Union countries are preparing for extraordinary negotiations on Saturday aimed at finalising a deal on a gas price cap that has divided the 27-country bloc. EU states have debated for months whether capping gas prices would help or harm their attempts to contain an energy crunch triggered by Russia slashing gas deliveries to Europe, which has pushed up fuel costs and stoked inflation. The European Commission proposed a price cap last month, and EU countries are aiming to agree on the cap at a Dec 13 meeting of their energy ministers in Brussels. But with days to go, countries still appear deeply divided, with some EU officials sceptical that a deal can be reached next week. Around 15 states including Italy, Poland and Belgium have said they want an EU-wide gas price cap, while a smaller camp including Germany, the Netherlands and Denmark are opposed. After initially calling for a cap, France has this week signalled it is concerned by the potential fallout in financial market...

Officials speak ahead of an extraordinary meeting of EU energy ministers at the European Council building, in Brussels, on Dec. 13. Virginia Mayo/The Associated Press European Union energy ministers meeting in Brussels on Tuesday failed to strike a final deal on a bloc-wide cap on natural gas prices, after months of infighting over whether the measure can ease Europe’s energy crisis. Responding to repeated requests from some countries, the European Commission proposed a price cap last month as the latest EU response to the economic upheaval caused by Russia cutting natural gas deliveries to Europe this year, leading to energy price spikes. But with countries deeply divided over the details of the proposed cap, Tuesday’s meeting did not yield a final decision – leaving EU energy ministers to try again for an agreement at another meeting on Dec. 19. “We have made progress, but we are not done yet. Not all questions could be answered today,” German Economy Minister Robert Habeck said af...