News Desk
ISLAMABAD/SINGAPORE: Crude oil prices rose more than 1 per cent on Monday after a key pipeline supplying oil to the United States remained shut at Kansan creek after more than 14,000 barrels spilled. Meanwhile, Russian President Vladimir Putin has threatened to cut production in retaliation for a price cap imposed by western countries on its oil exports.
Oil prices in the international market
In the international market, Brent crude futures were up 46 cents, or 0.6 per cent to settle at $76.56 a barrel, while US West Texas Intermediate (WTI) crude was traded at $71.59 a barrel, up 57 cents, or 0.8 per cent.
The gains for Brent and WTI follow declines in both grades last week to their lowest at $76.18 since December 2021 amidst fears that a possible global recession would impact oil demand.
Oil prices recorded a slight gain as the Keystone pipeline remained shut after 14,000 barrels of oil spilled over Kansas creek, the largest spill in US history over a decade.
Reuters said that the oil prices gain is also attributed to the Russian threat of reduction in supply over the price cap and the Chinese ease of Covid-19 curbs.
On Sunday, Canada’s TC Energy said it was yet to ascertain the exact cause of the Keystone oil pipeline leak last week in the US. It neither gave a timeline for the repair of the pipeline to resume operation.
The 622,000 barrel-per-day Keystone oil pipeline is a crucial artery for heavy Canadian crude from Alberta to refiners in the Midwest of the US and the Gulf Coast
On the other hand, China, the world’s largest crude oil importer, continued to relax its zero-Covid policy, streets in Beijing and other major cities remained deserted, with many businesses shut over the weekend while residents stayed indoors.
On Friday, Putin said that Russia, the world’s biggest oil exporter, could cut output and choke supply to any country that imposes a stupid price cap on its crude exports at the behest of G7 nations.
While the uncertainty surrounding G7 sanctions on price cap kept volatility high on oil prices, the embargo has had a limited impact on global oil markets, ANZ analysts said in a note.
On Sunday, Saudi Arabia also said that the impact of the G7 sanctions and price cap measures had yet to have any clear results and that its implementation was yet to have a bearing on Russia.
