DTN Oil Update
Oil Edges Up on Possible Halt of Russian Flows to India
VIENNA (DTN) -- Crude futures edged higher on Thursday, Oct. 16, morning as traders focused on supply-side risks after the U.S. and its allies stepped up efforts to reduce Russian oil exports.
Gains in oil futures were, however, capped as market participants awaited the Energy Information Administration's (EIA) oil supply-demand report for the week ended Oct. 10.
The NYMEX WTI contract for November delivery rose $0.39 to $58.66 bbl, while ICE Brent for December delivery climbed $0.35 to $62.26.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
November RBOB gasoline futures were up $0.0008 at $1.8352 gallon, while front-month ULSD futures advanced $0.0214 to $2.1962 gallon.
The U.S. Dollar Index softened 0.161 points to 98.38 against a basket of foreign currencies.
U.S. President Donald Trump said Wednesday, Oct. 15, that Indian Prime Minister Narendra Modi had assured him the country would stop purchases of Russian oil. U.S.-Indian trade negotiations are ongoing in Washington D.C., after Washington doubled tariffs on imports from India with the explicit goal of dissuading New Delhi from buying Russian crude.
After Europe banned imports of Russian oil and the G-7 implemented a price cap in response to the invasion of Ukraine, Indian refiners took advantage of the deeply discounted feedstock, with the country becoming the top destination for Russian crude oil exports. Russian oil currently accounts for about a third of Indian crude imports.
While there has so far been no formal government directive to refiners to halt purchases of Russian oil, Reuters on Thursday reported that Indian refiners were preparing to shift away from Russian oil starting in December.
The pressure on India is part of a larger effort to stymie energy revenues for the Russian state. Trump called Modi's concession a "big step," saying that "now we're going to get China to do the same thing."
U.S. Treasury Secretary Scott Bessent said on Wednesday that Japan was also expected to halt imports of Russian oil.
The U.K., meanwhile, announced new sanctions targeting two Russian oil majors, Rosneft and Lukoil. Refiners in China and India and dozens of tankers involved in shipping Russian oil were among the sanctioned entities.
Media outlets, meanwhile, report a mixed U.S. oil inventory report for last week from the American Petroleum Institute (API). Commercial crude oil inventories jumped by 7.4 million bbl during the week ended Oct. 10, while gasoline inventories expanded by some 3 million bbl and distillate fuel oil stocks shrank by 4.8 million bbl, the reports said, citing API data.
The EIA's official Weekly Petroleum Status Report for last week is scheduled for release at 12 p.m. EDT today, delayed by a day due to the Columbus Day holiday on Monday, Oct. 13.