But no oil embargo from the European Union? Oil prices and heating oils under pressure!

May 10, 2022, 8:00 a.m. By Joseph Wechselberger

Oil prices in the international commodity futures markets suffered heavy losses during yesterday’s trading. Futures may settle in Asian trading this morning, but heating oil prices will still start the day with further discounts.

European Brent oil contracts for July were at $104.70 a barrel, while the price of a barrel of West Texas Intermediate was $102.20 an hour. The Euro is able to recover somewhat against the US Dollar and is trading around $1.0580 this morning.

Unfortunately, it probably won’t be as easy as the EU thought it would cut off oil supplies from Russia. There is tremendous resistance from Eastern Europe. Hungary in particular, but also Slovakia, Bulgaria and the Czech Republic are highly dependent on Russian oil imports and see no prospect of completely dispensing with deliveries via the Druzhba pipeline at this time. Hungarian head of state Orban, who is not always popular within the European Union, has announced that he will veto it. To prevent the project from failing, European Commission President Ursula von der Leyen traveled to Hungary yesterday. Progress has been made, but more talks are needed.
Unfortunately, talks have recently become rare during the negotiations on the nuclear deal with Iran. And now the chief European negotiator, Enrique Mora, wants to travel to Tehran to make a last-ditch effort to prevent an imminent failure.
Weak economic data from China and cutbacks by Saudi oil company Aramco for June delivery to Asia and Europe also had a disappointing effect on crude oil prices yesterday.
Other than that, market participants are eagerly awaiting the monthly reports from the Energy Information Administration (EIA), OPEC and the International Energy Agency (IEA) this week. An EIA report is due later this evening, followed by the American Petroleum Institute (API) weekly oil inventory data after the US market closed.

In the foreign exchange market, the Euro managed to gain somewhat surprisingly compared to the US Dollar yesterday. Because the mood in the international financial markets has remained poor and the economic outlook for the Eurozone is rather bleak. The Sentix economic index published yesterday fell by 22.6 points in May. Analysts only expected a value of 20.8 points in advance.

The price of heating oil fell significantly yesterday at the beginning of the week and today there should be good cuts as well. Current accounts at least and first price trends from a morning perspective suggest a minus of about one cent per liter on average. In some areas, where there was no reaction to yesterday’s sharp drop in stock market prices, the decline is likely to be more pronounced. However, in general, the probability of a further decline in the coming weeks and months will remain rather low, since the demand for oil that does not come from Russia will remain large.

More market reports

Mon, 05/09/2022, 08:19

Oil prices changed little on Friday and continued to be stable. Also this morning, no significant price jumps have been observed so far, so heating oil prices start the new week with further discounts.

Friday, 05/06/2022, 08:41

Oil prices moved sideways at a high level yesterday and there is no new trend to discern today either. As gas oil prices are showing their weak side, heating oil prices are likely to drop further today.

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