Germany moves closer to ban Russian oil

Oil prices rallied on Thursday. The ICE Brent front-month end the day at $107.59/b a 2.1% increase and NYMEX WTI front-month closed 3.3% higher at $105.36/b.

The move was triggered by the comment of the German Economy Minister who said that Germany, a country that was reliant on oil deliveries from Russia, would be able to manage UE embargo on Russian’s oil. Supermajors on their side, are gradually cutting themselves from Russian’s oil: Exxon has started to exit Sakhalin-1 production site, Shell decided to stop buying refined products made of Russian crude or products.

Finally, crude benchmarks were supported by soaring prices of refined products, for instance front month NYMEX heating oil future reached an all-time high of $5.22/gal.

Even if supply is tight, insights about May 5 OPEC+ meeting indicate that the cartel will go on with the existing deal, and so modestly increase crude output by 432kb/d day in June. However, OPEC members were unable to meet target output in March by 1.45Mb/d.

On the other side, prices were pushed down by an even stronger USD, the dollar index (a measure of USD strength against six major western currencies) is at a 20-year high.

This morning oil prices are stable, as news from China shows no easing in the strict testing and lockdown policy imposed to tame Covid-19 spreading.