Business News Asia
Crude oil futures closed higher on Friday (Sept. 9) as concerns over oil supply and a slump in the U.S. dollar helped boost crude futures from seven-month lows. However, crude oil prices continued to decline this week.
- WTI crude futures rose $3.25, or 3.9%, to $86.79 a barrel, but were still down 0.1% for the week.
- BRENT crude futures rose $3.69, or 4.1%, to $92.84 a barrel, but were still down 0.2% on the week.
Crude oil contracts were driven by concerns over the global oil supply. Oil and gas supplies from Russia could disappear for Western countries after Russia threatened to cancel contracts if G7 countries enforce a Russian oil price cap.
Russian President Vladimir Putin has said that Russia will completely cut off energy supplies to the West if measures are taken to set a cap on the price of Russian oil.
“We will terminate our contracts with the West and we will end energy supply altogether if measures are taken against our interests. We will not send gas, oil, coal, or any kind of energy,” Putin said at the Eastern Economic Forum in Vladivostok, Russia.
On September 2, G7 finance ministers agree on measures to cap Russian oil prices. This is intended to weaken Russia’s financial position so that it does not use the proceeds to support its war with Ukraine. The measure to set a cap on Russian crude oil prices will come into force on December 5, 2022, and will also apply to petroleum products from February 5, 2023.
The dollar’s decline on Friday after its recent gains also supported crude futures. The dollar index against the six major currencies in a basket of currencies fell 0.64% to 109.0030.
The weakening of the dollar makes crude oil contracts cheaper and more attractive to investors holding other currencies.
Crude oil futures also jumped despite the EIA reporting Thursday (Sept. 8) that U.S. crude inventories rose by 8.8 million barrels last week.
However, crude oil futures continued to decline this week as concerns about oil demand continue to weigh on prices.
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Saturday, September 10, 2022