Oil prices fell by %2 per barrel on Wednesday [1], as investors grew increasingly concerned that recent economic data will prompt more aggressive interest rate hikes from central banks, which could put pressure on economic growth and demand. The U.S. Federal Reserve’s policy meeting is due on Wednesday and is expected to indicate how much further rates will need to be raised to keep inflation in check while the economy continues to remain stronger than expected. [2]
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Europe’s economy has been showing signs of resilience, according to a note from UBS released after Tuesday’s business surveys, while Russia is planning to reduce crude exports from western ports in March by 25%. [3] Morgan Stanley has also raised their global oil demand growth estimate for this year by 36%, citing the growth in China’s reopening and the recovery of the aviation industry. [4]
References:
[1] Oil drops over 2% on demand worries ahead of U.S. … – Reuters [2] Oil Drops Over 2% on Demand Worries … – US News Money [3] Oil drops over 2% on demand worries ahead of … – StreetInsider
Russia will cut Oil Exports up to 500,000 barrels per day
Russia is reportedly planning to slash its oil exports by up to 500,000 barrels per day (bpd) in March, according to sources familiar with the matter. This comes after the country’s oil exports by sea surged by 26% to 3.6 million bpd in the week ending February 17, the highest level in more than a month, according to shipment tracking data compiled by [1] Bloomberg.
The OPEC+ alliance also announced a 2 million barrels a day cut in oil production in Wednesday’s meeting, [2] which could drive up oil and gas prices after weeks of downward trends [3]. These cuts come as energy costs around the world are on the rise, and are part of an effort to stabilize prices and keep the market balanced.
References:
[1] Russia to cut oil output by around 5% in March – Arab News [2] Russia’s Weekly Oil Exports Jump To Highest Level In Over A … [3] OPEC+ makes deep oil output cuts sought by Saudi Arabia …According to Statistica, in January 2023, crude oil production in Russia was estimated at 9.7 million barrels per day, having decreased from the previous month. In April 2022, the output saw a decrease due to Western bans on oil imports from Russia due to its invasion of Ukraine that started in February 2022.
