DTN Oil Update
Oil Prices Soften as Oversupply Woes Take Center Stage
VIENNA (DTN) -- Oil prices softened Monday morning as the newest European Union sanctions package against Russia seemed likely to impact Russian oil flows less than expected.
In crude oil, NYMEX-traded WTI for October delivery dropped $0.38 to $62.80 barrel (bbl), while ICE Brent for November delivery fell $0.45 to $66.23 bbl.
Among oil products, October RBOB gasoline futures slid $0.0087 to $1.9620 gallon, and the front-month ULSD contract retreated $0.0138 to $2.2851 gallon.
The U.S. Dollar Index eased by 0.155 points to 97.115.
The EU's revised 19th sanctions package will add more than 100 tankers to its sanctioned vessels list as part of Russia's so-called shadow fleet. Details have yet to emerge, but early reports suggested the economic block will refrain from implementing broad secondary sanctions against buyers of Russian oil, instead targeting specific entities across India and China. The sanctions will reportedly affect about a dozen Chinese and several Indian companies, mostly refiners and shippers.
Meanwhile, Iraq was reportedly nearing a deal to restart flows on the Kirkuk-Ceyhan pipeline which can deliver up to 400,000 barrels per day (bpd) of crude oil from northern Iraq to export terminals in Turkey. The pipeline has been shut since 2023 over disputes between the Iraqi federal government, Kurdish regional government and international oil companies after Turkey was fined $1.5 billion for "unauthorized exports." An agreement could see the immediate restart of at least 200,000 bpd of oil flows to international markets already burdened by oversupply woes amid lackluster global demand growth and OPEC's commitment to open the spigots.
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