By Ketki Saxena
Investing.com – Today's Energy Note: As of 2:15 p.m ET, WTI futures were trading at $113.12 a barrel, down 1.57%, while Brent was trading at $119.86 a barrel, or down 1.43% so far today.
Both benchmarks drifted lower as:
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The EU remains divided on a Russian oil embargo, with today’s meetings in Brussels failing to reach a consensus
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A warning from OPEC that it is concerned about the consequences of tightening sanctions on Russian oil
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Discussions by the U.S. and allies to coordinate further releases of crude in order to address the global shortage, and expectations that Canada will boost exports
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The continued closure of a key link in the Caspian Pipeline Consortium, which transports oil between Russia, Kazakhstan. Russia says the damage is weather-related and will take over a month to repair
Crude prices drifted lower today driven by a host of reasons related to the Russia-Ukraine crisis but still at historically high levels on supply concerns from Eastern Europe.
The EU continues to remain split on its proposal to ban Russian oil in a U.S.-style embargo. Members of the block including Germany and the Netherlands argue that banning Russian oil, on which the EU is heavily dependent, will be catastrophic for the economies. Baltic states like Latvia and Estonia, which are less dependent on Russian energy than Germany, are calling for an absolute ban on Russian energy.
OPEC also added an unofficial note of dissent, warning that the enactment of proposed EU sanctions would destabilize global energy markets, causing a surge in prices and uncertainty more volatile than already experienced this year.
Energy prices in the EU have spiked since the onset of the Russia-Ukraine conflict, and the bloc is now facing a shortage of diesel, a critical industrial fuel necessary for heavy machinery, transportation, agriculture, power and heating. Russia is Europe’s largest supplier of diesel and will be difficult to replace as a supplier.
U.S. Gasoline RBOB Futures, which closely track the price of crude were down 1.24% at $3.396 a gallon.
U.S. natural gas futures continue higher, at $5.399 or up 3.19% in the day’s trading, driven by the likelihood that the U.S. will increase exports of Liquified Natural Gas (LNG) to Europe. Despite the official onset of spring, NatGas also remain supported by the forecast of a cool spell next week.
In another Natural Gas news, Putin today now announced that “friendly countries”, including China and Turkey will be able to purchase Russian Natural gas in Bitcoin. Interestingly, China has doubled its import of LNG from Russia since a year ago, which along with EU indecisiveness significantly undermines the effectiveness of the sanctions.
Today’s announcement follows Putin’s statement yesterday that “unfriendly” countries will be required to settle payments for Russian gas in the Ruble.
All currencies USD, unless noted otherwise.