After closing the week on a high, crude oil pricing began the week on a slow start. With West Texas Intermediate (WTI) closing at $63.36, and Brent at $67.20, a barrel, both categories of the commodity began the week at $62.68 and $66.68 per barrel respectively.
The loss may however not represent the likely flow of prices going into the week. Given its trajectory of gains for a second week in a row, despite fluctuations earlier in the week on persistent worry about oversupply, due largely to the continued drone attacks of Ukrainian forces on Russian refineries.
Crude should have received some support from the Federal Reserve’s decision to cut interest rates by 25 basis points, but since the decision was expected, it had probably lost its power over oil prices even before it was announced. This is aside the U.S. Department of Energy reporting a larger-than-expected build in middle distillate stocks, which apparently sparked doubts about the strength of demand in the world’s biggest consumer of oil products. Interestingly, the fact that distillate stocks have been trending consistently lower than seasonal averages for much of this year remains overlooked.
READ ALSO: FULL LIST: Cheapest universities in the world for international students
Meanwhile, Ukrainian forces attacked two more Russian refineries, but this failed to move the needle on international oil prices because the attacks coincided with comments by President Donald Trump that he would rather have cheap oil than more sanctions on Russia. “President Trump’s comment that he preferred low prices over sanctions on Russia also eased concerns over supply disruptions,” ANZ commodity analyst Daniel Hynes said earlier today in a note, as quoted by Reuters.
A statement by Transneft earlier in the week, denying a report that the refinery attacks could lead to production curtailment may have also helped keep a lid on crude prices. The pipeline operator said there were no curtailment plans, adding that the report, by Reuters, sought to cause reputational damage and that the goal was to “destabilize the situation within the context of the information war the West is waging” on Russia.