Prices of oil slip as Druzhba pipeline is expected to flow again
Hungarian energy group MOL has transferred the transit fee for use of the Ukrainian section of the pipeline
10 August 2022 - 12:27
byRowena Edwards
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London — Oil prices edged lower on Wednesday on expectations that Druzhba pipeline flows would resume shortly and demand concerns ahead of publication of key demand indicators.
Brent crude futures fell 73c, or 0.76%, to $95.58 a barrel by 9.28am GMT.
US West Texas Intermediate crude futures were down 64c, or 0.71%, at $89.86.
Both contracts slipped by more than $1 a barrel earlier in the session.
Oil flows to central Europe via the Druzhba pipeline will resume shortly after Hungarian energy group MOL transferred the transit fee for use of the Ukrainian section of the pipeline, MOL said on Wednesday.
Demand fears also weighed on prices, analysts said.
“Fears of recession-induced demand destruction are the single-biggest price driver currently and the principal reason Brent is trading sub-$100 a barrel,” said PVM analyst Stephen Brennock.
The consumer price index (CPI) report is due to be released on Wednesday afternoon and will be scrutinised for a steer on how steeply the US Federal Reserve will raise interest rates in the coming months.
The report is likely to show that underlying inflation pressures remain elevated as the Fed considers whether to embrace another supersized interest rate increase in September, which could curb economic activity and fuel demand.
US crude oil stocks, meanwhile, rose by about 2.2-million barrels for the week ended August 5, according to market sources citing American Petroleum Institute (API) figures. Analysts polled by Reuters had forecast that crude inventories would rise by about 100,000 barrels.
Official government data was due later on Wednesday.
Though concerns over a potential global recession have weighed on oil futures recently, US oil refiners and pipeline operators expect energy consumption to be strong for the second half of 2022, according to a Reuters review of company earnings calls.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Prices of oil slip as Druzhba pipeline is expected to flow again
Hungarian energy group MOL has transferred the transit fee for use of the Ukrainian section of the pipeline
London — Oil prices edged lower on Wednesday on expectations that Druzhba pipeline flows would resume shortly and demand concerns ahead of publication of key demand indicators.
Brent crude futures fell 73c, or 0.76%, to $95.58 a barrel by 9.28am GMT.
US West Texas Intermediate crude futures were down 64c, or 0.71%, at $89.86.
Both contracts slipped by more than $1 a barrel earlier in the session.
Oil flows to central Europe via the Druzhba pipeline will resume shortly after Hungarian energy group MOL transferred the transit fee for use of the Ukrainian section of the pipeline, MOL said on Wednesday.
Demand fears also weighed on prices, analysts said.
“Fears of recession-induced demand destruction are the single-biggest price driver currently and the principal reason Brent is trading sub-$100 a barrel,” said PVM analyst Stephen Brennock.
The consumer price index (CPI) report is due to be released on Wednesday afternoon and will be scrutinised for a steer on how steeply the US Federal Reserve will raise interest rates in the coming months.
The report is likely to show that underlying inflation pressures remain elevated as the Fed considers whether to embrace another supersized interest rate increase in September, which could curb economic activity and fuel demand.
US crude oil stocks, meanwhile, rose by about 2.2-million barrels for the week ended August 5, according to market sources citing American Petroleum Institute (API) figures. Analysts polled by Reuters had forecast that crude inventories would rise by about 100,000 barrels.
Official government data was due later on Wednesday.
Though concerns over a potential global recession have weighed on oil futures recently, US oil refiners and pipeline operators expect energy consumption to be strong for the second half of 2022, according to a Reuters review of company earnings calls.
Reuters
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