Oil retreats as Russian diesel supply prospects counter Gulf supply risks
USO•Oil prices fell as traders weighed the prospect of additional Russian diesel supplies against risks to Gulf energy infrastructure and shipping. Brent dropped 1.52% to $105.03 a barrel and U.S. WTI fell 1.77% to $92.08.
1. Prices retreat
Brent crude futures fell $1.62, or 1.52%, to $105.03 a barrel, while U.S. West Texas Intermediate crude futures declined $1.66, or 1.77%, to $92.08. Both benchmarks had risen nearly $2 in the previous session.
2. Diesel supply outlook
President Donald Trump said Russia had agreed to supply diesel to global markets, and his administration temporarily lifted U.S. sanctions on Russian fuel. PVM Oil analyst Tamas Varga said Russia’s promise to supply 3 million to 3.5 million tons per month by year-end was unlikely to be fulfilled, given the state of the country’s refining sector.
3. Supply risks and demand
Concerns persisted after attacks on Riyadh’s international airport and reports of tanker attacks near the Strait of Hormuz. OPEC said shipping and insurance costs had risen to more than one-third of commodity value, while Secretary General Haitham Al Ghais said the group had cut its oil demand growth forecast for this year to 400,000 barrels per day from 1.4 million.
