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G7 countries back the price cap on Russian oil. Bloomberg found out about the discussion in the EU of the $60 price cap on Russian oil

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g7 countries back price cap on russian oil

EU member states are discussing a $60 price cap on Russian oil, Bloomberg reported, citing knowledgeable sources. G7 countries back the price cap on Russian oil.

The EU had planned to announce a price cap on Russian oil on November 23, but negotiations within the bloc were delayed. In four days, on December 5, the embargo on fuel imports to the European Union by sea will come into force. but the decision has not yet been taken and coordinated with the G7 countries, which are not members of the EU. Within the European Union, Poland, Lithuania and Estonia require lowering the bar much lower, and Greece, Cyprus and Malta, which have a very developed shipping industry, on the contrary, insist on softer conditions. Explained Bloomberg. 

It is still unclear whether both groups are willing to go to the limit of $60 a barrel, but most – agree, subject to other requirements, say agency sources. Negotiations are ongoing. The decision requires the approval of all EU members and the agreement of the decision with the G7. According to one of Bloomberg’s sources, $60 a barrel falls within a suitable range for the G7.

What does the price cap on Russian oil mean?

What does the price cap on Russian oil mean? $60 a barrel is even a bit more than what Russian oil costs on the market now, Bloomberg said. The purpose of the cap is to limit Russia’s income from selling oil while keeping it on the world’s market. And EU sanctions, if the ceiling price is not set, will prohibit maritime transport of Russian oil to third countries and insurance of these shipments. 

For the scheme to work, the ceiling must be attractive enough for Russia to continue trading; otherwise Moscow could threaten to reduce production, and this would lead to a spike in global oil prices. Bloomberg explained.

The day before the EU embargo goes into effect, OPEC+, in which Russia also sits, will meet. On November 29, sources told Bloomberg that the format of the meeting was suddenly changed to an online meeting instead of a face-to-face meeting. The sources at Bloomberg did not explain what this was about. But we note that the tension in the market is already affecting even Google stock price predictions

At the last meeting on October 5, which was the first face-to-face meeting since the beginning of the pandemic, OPEC+ went for the sharpest production reduction since 2020 – by 2 million barrels per day. 10 traders out of 17 surveyed by Bloomberg expected that new production cuts could follow at the new meeting as well.

Earlier we reported that oil prices are falling amid protests in China.


Oil prices continue to decline, with Brent falling below $82 a barrel. Will oil prices go down even more?

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will oil prices go down

Oil prices continued to decline on Friday, finishing in the red for the second week in a row, amid some weakening optimism of traders about demand prospects in China and continuing growth of inventories in the U.S. Will oil prices go down even more?

Oil has been trading in a range of around $10/bbl since early this year. On the one hand, the market is waiting for an increase in demand in China after the lifting of quarantine restrictions in the country. on the other hand — it fears a decline in activity in developed countries due to the continuing increase in interest rates by leading global central banks, said Bloomberg.

Also, starting next week the EU embargo on Russian oil products, accompanied by the initiative of the price ceiling, and traders will wait for the consequences of this decision.

Will crude oil prices go down? The oil market is in limbo, waiting for tangible signs of increased demand in China,” notes Vanda Insights founder Vandana Hari. — The factor of the Russian oil products supply ban in the EU is not the main one, but it still creates some uncertainty.”

The value of April futures for Brent oil at London’s ICE Futures Exchange on Friday is $81.97 per barrel, which is $0.20 (0.24%) lower than at the close of the previous session. At the close of trading on Thursday, those contracts had fallen by $0.67 (0.8%) to $82.17 per barrel.

The price of WTI futures for March crude oil at electronic trades on the NYMEX fell by $0.19 (0.25%) to $75.69 per barrel by that time. By the close of previous trading these contracts went down by $0.53 (0.7%) to $75.88 per barrel.

Earlier we were informed that world demand for gold grew last year by 18% and reached an 11-year maximum.

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Global demand for gold rose by 18% last year to an 11-year high

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global demand for gold

Global demand for gold in 2022 increased by 18% to 4,741 thousand tons, the highest since 2011, according to the annual report of the World Gold Council (WGC).

Purchases of gold by central banks of the world grew for the second consecutive year and reached 1,136 thousand tons. Regulators from developing countries, including Turkey and China, were the main buyers of gold.

“In 2022, central banks not only became net buyers of gold for the 13th consecutive year, but also purchased the second largest volume of the precious metal in the history of observation since 1950,” the paper noted.

Global market for gold

Investment demand for gold increased by 10% and reached 1,107 thousand tons. Including purchases of bars and coins increased by 2% – to 1.217 thousand tons, and outflows from gold-backed ETFs amounted to 110 tons, which corresponds to cash outflows of about $3 billion.

Gold use in the technology sector fell by 7% in 2022 due to lower demand for consumer electronics and totaled 309 tons. Annual gold demand from jewelry companies decreased 3% to 2,086 thousand tons.

Meanwhile, total gold supply in 2022 increased by 2% to 4,755 thousand tons. This included a 1% increase in gold production to a four-year high of 3,612 thousand tons.

WGC keeps a positive outlook for gold in 2023 amid continuing weak dollar, growing risks of recession and increased geopolitical risks.

Demand from central banks is more difficult to predict, but given the overall reduction in reserves, we can expect that purchases of precious metals by central banks around the world will be more moderate this year than last year, according to the report.

Earlier we reported that Oil continues to lose value little by little

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Oil continues to lose a little in price. Why is oil getting cheaper?

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why is oil getting cheaper

Oil prices continued to decline slightly on Monday afternoon as investors assessed news from Iran and promises by PRC authorities to stimulate demand. March futures on Brent crude oil fell by $0.09 (0.1%) to $86.57 per barrel at the ICE Futures exchange in London. Why is oil getting cheaper?

Is crude oil getting cheaper? WTI futures quotes for March fell by $0.05 per barrel to $79.63 per barrel at NYMEX by the indicated time. Brent dropped 1.1% and WTI gained 2.4% at the end of the previous week.

On Saturday evening, drones attacked a military-industrial facility in Iran’s Isfahan. The origin of the drones is unknown, but many media outlets believe Israel launched the attack. The government of the Jewish state refrained from commenting.

“It is unclear what exactly is going on in Iran, but any escalation in the region threatens the risks of supply disruption,” said Stefano Grasso, a senior portfolio manager at 8VantEdge.

The main event for the oil market this week will be the February 1 meeting of OPEC+ ministers. According to most experts, the coalition will not change production quotas after this meeting.

Also, the Chinese authorities on Saturday promised to support the restoration of fuel demand in the country, as it is the main engine of the economy and imports, notes MarketWatch. At the same time, a ban on imports of Russian petroleum products to the EU goes into effect on Feb. 5.

“We are evaluating Russian supplies on the one hand and Chinese demand on the other,” Grasso noted. – Both could fluctuate by more than 1 million barrels per day in either direction.”

Earlier we reported that the media named the consequences of the EU embargo on Russian oil products.

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