
Oil prices steady as markets doubt crude sanctions on Russia
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Oil prices steady as markets doubt crude sanctions on Russia
Brent crude futures slipped 0.2% to trade at $69.17 per barrel, at the time of writing. West Texas Intermediate futures (CL=F) were muted at $67.32 a barrel. The European Union approved its 18th package of sanctions against Russia on Friday. A key feature of the new sanctions is the introduction of a floating price cap on Russian crude oil exports, which will be set 15% below prevailing market prices. Despite the intensified sanctions, analysts at ING suggested that the market’s muted reaction indicated scepticism about the measures’ effectiveness.
Brent crude futures (BZ=F) slipped 0.2% to trade at $69.17 per barrel, at the time of writing, while West Texas Intermediate futures (CL=F) were muted at $67.32 a barrel.
The European Union approved its 18th package of sanctions against Russia on Friday, implementing some of the toughest restrictions yet in response to the ongoing conflict in Ukraine. A key feature of the new sanctions is the introduction of a floating price cap on Russian crude oil exports, which will be set 15% below prevailing market prices.
This measure, which will take effect on 3 September after a 90-day transition period, aims to reduce Russia’s energy revenues without causing significant disruptions to global oil supplies.
“It’s important to point out that while the EU has lowered the price cap, the G7 cap remains unchanged. The EU would need to get the US on board to lower the cap,” ING analysts noted in a report.
Read more: FTSE 100 LIVE: Markets calm as EU readies plan for no-deal trade scenario with US
In tandem with the EU’s sanctions, the UK has also ramped up its efforts to diminish Russia’s oil revenues by imposing a lower price cap. The UK government announced on Friday that the cap on Russian oil will be reduced from $60 per barrel to $47.60 starting 2 September. The UK’s price caps on refined oil products, however, remain unaffected: $100 for high-value refined products like diesel and petrol, and $45 for low-value refined products such as fuel oil.
Despite the intensified sanctions, analysts at ING suggested that the market’s muted reaction indicated scepticism about the measures’ effectiveness.
“However, the part of the package likely to have the biggest market impact is the EU imposing an import ban on refined oil products processed from Russian oil in third countries,” the analysts said.
“But clearly, it will be challenging to monitor crude oil inputs into refineries in these countries and, as a result, enforce the ban.”
Gold prices climbed on Monday, buoyed by a weaker US dollar, as investors kept a close watch on US trade negotiations and awaited key catalysts, including the Federal Reserve’s upcoming policy meeting.
Gold futures (GC=F) were up 0.6% to $3,377.30 per ounce, at the time of writing, while spot gold rose 0.5% to $3,367.79 per ounce.
The US dollar index (DX-Y.NYB), which measures the greenback against a basket of six currencies, was down 0.2% to 98.29.
Source: https://uk.finance.yahoo.com/news/oil-prices-steady-crude-sanctions-russia-082837265.html