DTN Oil Update
Oil Dips Further as Russian Supply Stranded by Sanctions
SECAUCUS, N.J. (DTN) -- Crude futures remained under pressure on Friday, Nov. 21, as the official start of U.S. sanctions against Rosneft and Lukoil threatened to leave millions of barrels of Russian oil at sea, adding to a global oversupply situation.
The U.S. Treasury has set a Nov. 21 as deadline for crude buyers and transporters to sever trading relationships with Rosneft and Lukoil as the Trump administration maximizes its campaign to get Moscow to end the war in Ukraine by depriving it of crucially needed oil money.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
Bloomberg, quoting figures from analytics firm Kpler, reported that close to 48 million barrels of Rosneft and Lukoil crude of mostly Urals and ESPO grades were currently on water or in the process of being loaded.
It said Russia had prioritized loading of oil tankers, keeping to a pace of around 3.4 million bpd, leaving roughly 50 tankers headed mostly toward China and India without destinations as intended recipients distanced themselves from the cargoes.
That oil on the water adds to recent forecasts from the International Energy Agency and the Organization of the Petroleum Exporting Countries that suggest oil markets were already in a glut as of the third quarter of this year.
Still, Ukraine and its European allies' rejection of key parts of a Russia-U.S. plan to end the near four-year war by Moscow added to geopolitical tensions that limited some of the losses in crude.
The NYMEX WTI contract for December delivery fell $0.67 to $58.33 bbl. ICE Brent for January delivery slipped by $0.58 to $62.77 bbl.
Among refined products, December RBOB gasoline futures dropped by $0.0092 to $1.9092 gallon. Front-month ULSD futures retreated by $0.0716 to $2.4617 gallon.
The U.S. Dollar Index rose 0.70 points to 100.167, aiding to the pressure across commodity markets.