Oil price closes more than 3% lower as G7 seeks cap on Russian oil price

Crude oil futures closed more than 3% lower on Wednesday (Nov. 23) following reports that the G7 nations would cap Russian oil prices below $70/barrel.

  • WTI crude futures dropped $3.01, or 3.7%, to settle at $77.94 a barrel.
  • BRENT crude futures dropped $2.95, or 3.3%, to close at $85.41 a barrel.

Crude oil futures fall after reports that the Group of 7 leading industrialized countries (G7) will set a cap on Russian oil prices in the range of $65-70/barrel. Ambassadors from 27 EU countries are discussing the G7 proposal to reach consensus.

The G7, along with the EU and Australia, plan to introduce the cap on Russian oil prices on December 5. It will apply to Russian oil shipped by tanker, excluding oil transported by oil pipelines.

The imposition of a cap on oil prices is a punitive measure against Russia for its military invasion of Ukraine, which, once announced, will put shipping companies, insurance companies and reinsurers on notice. They will not be allowed to provide services related to the transportation of Russian oil cargoes that exceed the cap set by the G7 and its allies.

Oil markets were also under pressure after the U.S. Energy Information Administration (EIA) reported that gasoline inventories rose by 3.1 million barrels last week.

New York oil trading will be closed on Thursday, November 24, for Thanksgiving.

The Spot Market is Open

Thursday, November 24, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
11.40

77.87

-0.07

-0.09%

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