Fears Of An Economic Slowdown Drag Oil Prices Lower

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Fears of economic slowdown are bleeding into the oil market. Oil demand is being threatened by extended lockdowns in China, inflation-driven interest rate hikes, and fears of Europe potentially dropping into recession if the Russia-Ukraine war continues to escalate. Ebbing inventories, with the US poised to see stock draws across the crude/product spectrum, contributed some support but failed to halt ICE Brent futures from falling towards the $100 per barrel mark.

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Saudi Arabia Blames High Fuel Prices on Lack of Investment. Insufficient investment in global refining capacity has been one of the key drivers in soaring product prices, according to Saudi Arabia’s energy minister Prince Abdulaziz bin Salman, reiterating the claim that lack of investment is keeping oil markets from rebalancing.

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EU to Drop Shipping Sanctions Against Russia. The European Union is expected to drop a proposed ban on EU-owned vessels from transporting Russian oil anywhere in the world, with Greece, the continent’s leading shipping nation, threatening to veto the sanctions proposal if it were maintained.

Venezuela Starts Refining Heavy Iranian Oil. Venezuela has begun importing Iranian heavy crude to feed its domestic refineries, widening the swap agreement between the two countries that first saw PDVSA importing condensate to dilute its heavy waxy crude.

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US Mulls Revival of Oil Spill Tax on Crude Exports. The Biden Administration is appealing a 2019 court ruling that found US crude exporters should be exempt from a 9 cent per barrel oil spill cleanup tax, saying the decision blocks a critical source of funding.

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Petrobras Vows to Keep Fuel Pricing Market-Based. Newly appointed top executives at Brazil’s national oil company Petrobras (NYSE:PBR) stated they would stick to market-oriented pricing policies, hiking diesel prices by 9%, despite public criticism coming from President Jair Bolsonaro who wants to see fuel prices capped.

Israel Sees Another Offshore Gas Discovery. Mediterranean-focused gas producer Energean (LON:ENOG) announced it had made another commercial gas discovery off the coast of Israel, although the 8 bcm of recoverable gas reserves was just a fraction of the pre-drilling 21 bcm resource estimate.

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