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Market News International oil prices hover near three-month highs, bulls benefit from three major positives

International oil prices hover near three-month highs, bulls benefit from three major positives

On Friday (June 10), international oil prices were under pressure, but not far from the three-month high set this week, as the supply gap caused by Western sanctions on Russia was difficult to make up due to strong demand for fuel in the United States, the world's largest consumer. Saudi Arabia cuts supply to Asian customers.

2022-06-10
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On Friday (June 10), international oil prices were under pressure, but not far from the three-month high set this week, as the supply gap caused by Western sanctions on Russia was difficult to make up due to strong demand for fuel in the United States, the world's largest consumer. Saudi Arabia cuts supply to Asian customers.

At 16:27 GMT+8, NYMEX crude oil futures fell 0.16% to $121.32 a barrel; ICE Brent crude futures fell 0.14% to $122.90 a barrel.


Both cities hit new highs since March 9 this week, at $123.18 a barrel and $124.40 a barrel, respectively. The release of reserves in many countries has limited results, and the growth of global crude oil supply is slow. The United States ushered in the peak summer fuel demand, which will continue to push up crude oil prices.

"The record surge in gasoline and diesel consumption during the U.S. summer driving season, with gasoline prices surging alongside lower inventories, suggests the market is vulnerable to supply disruptions," Fitch analysts said in a note.

European buyers scrambled to circumvent Russian crude after the European Union agreed to a gradual oil embargo on Moscow, but the resulting supply shortfall won't be made up anytime soon. Investors are already starting to factor in the fact that the imbalance in supply and demand mechanisms will persist for longer after sanctions take effect.

Russian President Vladimir Putin said on Thursday that the West will not be able to completely stop using Russia's energy resources in the next few years, despite efforts to reduce its reliance on Moscow for energy supplies. Sanctions have reduced oil supplies to global markets while prices have risen. Russian companies will not block their own wells.

U.S. energy security envoy Amos Hochstein said earlier on Thursday that Russia could now earn more from fossil fuels than it did before the Ukrainian conflict, as higher global prices offset Western efforts to limit Russian oil sales.

"Any declines in the oil market will be limited as global supply-demand tensions for crude and refined products remain a strong support factor," said Jeffrey Halley, senior market analyst at OANDA.

Saudi Aramco has notified at least four buyers in Asia that it will cut crude contracts for July, people familiar with the matter said on Thursday. The move comes after Saudi Arabia raised its July official selling price to Asia to an unexpectedly high level.
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