(New York) Oil prices jumped on Friday, boosted by Russia’s threat to cut oil production, combined with disruptions from a winter storm in the United States.
The price of a barrel of Brent North Sea oil for February delivery rose 3.63% to close at $83.92.
As for the barrel of American West Texas Intermediate (WTI), also due in February, it climbed 2.67% to 79.56 dollars.
The two reference varieties reached, in session, their highest level for nearly three weeks.
For Edward Moya, of Oanda, the movement was prompted by statements by Russian Deputy Prime Minister Alexander Novak, who warned that Russia could cut production by 500,000 to 700,000 barrels per day in early 2023.
The message was interpreted as a response to the entry into force in early December of a European Union embargo on Russian crude, with a price cap mechanism for deliveries outside Europe.
Russian President Vladimir Putin “is a master of manipulation and he knows that oil prices are a weak point for the West,” commented John Kilduff of Again Capital.
Reducing production on existing wells can be tricky, recalls the analyst, and even damage the installations, which had prompted operators to put into perspective, so far, the prospect of a contraction in Russian production.
“I am skeptical” about the scope of this threat, explains John Kilduff. “But in a market with low volumes, on the eve of a Christmas weekend, it resonates” and has a strong effect on prices.
The US market will be closed on Monday, a US holiday.
Operators were also closely monitoring the passage of winter storm Elliott, which has already caused disruptions in several refineries in Texas, where the temperature is expected to fall well below 0 ° C this weekend.
“It’s going to put pressure on refined product volumes,” predicts John Kilduff, “so that’s helping to support prices.” »
In three days, the wholesale price of heating oil climbed 10%, while the gasoline futures contract gained up to 6% in Friday’s session alone.
The market ignored the announcement by the Canadian group TC Energy, which will launch operations to restart the segment still shut down of its Keystone pipeline, which transports Canadian oil to the United States.
This is the part that connects Steele City (Nebraska) to the important Cushing terminal (Oklahoma), closed for more than two weeks due to a leak in northern Kansas.