Oil price continued to drop

On Thursday, oil prices were down. ICE Brent front month moved 1.5% lower to settle at $110.05/b and NYMEX WTI went 1.8% down to settle at $104.27/b.

Yesterday was a choppy trading session, oil market did not have a clear trend and moved up and down, between $102.32/b and $/b107.05 for NYMEX WTI. There are growing fears related to an incoming recession in the next quarters caused by the hawkish policy conducted by numerous central banks. But, at the same time, the overall picture shows that oil supply is very tight and could remain tight for several years.

One explanation of the recent price decline could be the fact that Russia is able to find alternative buyers more easily than expected. In May, China imports of Russian oil were up by 55% yoy to 2.0mb/d meaning Russia is now the first supplier of oil to China (above Saudi Arabia). An Indian classification society is granting safety certification to dozen tankers owned by Russian company Sovcomflot after the Russian classification society was suspended in March.

This Friday morning, oil is flat.