NEW YORK, KOMPAS.com – Crude oil price The world recorded an increase late in trading on Monday (12/12/2022) local time or Tuesday morning WIB. Movement price of crude oil The world has been dulled by the impact of the Keystone Pipeline closure affecting US oil supplies.
To collect CNBC oil price Brent crude futures rose 2.5% to $77.99 a barrel. Meanwhile, the price of West Texas Intermediate (WTI) crude oil stabilized at $73.17 a barrel, up 3%.
Oil price movements are being influenced by supply concerns as the main pipeline supplying oil to the US is shut down. Not only that, the threat from Russia will reduce production, even as COVID-19 restrictions begin to ease in China, which should be able to support fuel demand.
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Last week, Brent and WTI oil prices fell to their lowest levels since December 2021 as investors feared a possible global recession could hurt oil demand. However, an extended outage from TC Energy Corp’s Canada to the US helped reverse the price trend.
“Repair of the Keystone Pipeline appears to be taking longer than anticipated, which increases the possibility of further inventory drawdowns in Cushing,” said Jim Ritterbusch of Ritterbusch and Associates.
Ritterbusch said traders are concerned about how long it will take to clean up and restart the flow of the Keystone Pipeline after it spilled more than 14,000 barrels of oil last week. The oil spill was the largest U.S. crude spill in nearly a decade.
Due to the incident, TC Energy closed its crude oil pipeline in the Kansas area on Wednesday. The company said it has not determined a cause or timetable for restarting the pipeline.
The Keystone Line is an important route for the flow of crude oil from Canada that is sent to US refineries and the Gulf Coast for export. The outage is expected to complicate supplies at the Cushing, Oklahoma storage hub and the delivery point for U.S. crude futures.
Some analysts expect overall average crude inventories to decline by about 3.9 million barrels in the week to Dec. 9, 2022. Meanwhile, Bank of America Global Research says Brent prices could recover above $90 a barrel, supported by monetary policy. and the reopening of the Chinese economy.
“The reopening of China is definitely the focus of the market,” said Phil Flynn, an analyst at Price Futures Group.
FYI, China, as the world’s largest importer of crude oil, continues to ease its strict zero Covid-19 policy. However, the streets of Beijing still appeared deserted and many businesses were closed for the weekend.
“Oil markets are likely to remain volatile in the near term due to uncertainty over the impact of the EU ban on Russian oil. Similarly, headlines about China’s zero Covid-19 policy and central bank policies in the The US and Europe still loom over prices,” UBS analysts said in a statement.
Russian President Vladimir Putin said last week that Russia could cut production and would refuse to sell oil to any country that imposes price caps on Russian oil exports.
Saudi Arabia’s energy minister also said that price cap measures have yet to have clear results. On the other hand, the number of tankers waiting to pass through Istanbul’s Bosphorus Strait started to decline on Monday, indicating the recent slowdown in shipping traffic.
“An emerging EU embargo on Russian crude could increase the risk of energy prices becoming more subdued in the coming months. But supply uncertainties are expected to ease in spring 2023, once the embargo on oil products is imposed (on Feb. 5), Deutsche Bank said in a statement.
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