Monitoring Desk
ISLAMABAD/SINGAPORE: Oil prices eased on Monday after increasing 2 percent in the previous session as investors shrugged off the impact of Russian output cuts, instead focusing on short-term demands and the concern stemming from refinery maintenance in the United States and Asia.
world’s third-largest oil producer
Prices were raised on Friday after Russia, the world’s third-largest oil producer, said it would cut crude production in March by 500,000 barrels per day, or about 5 percent of output, in retaliation against western curbs on its exports that were imposed in response to the Ukraine war.
Brent crude futures fell 69 cents or 0.8 per cent to 85.70 dollars a barrel by 0153 GMT after a 2.2 percent gain on Friday. US West Texas Intermediate crude was at 79.04 dollars a barrel, down 68 cents, or 0.9 percent, after rising 2.1 percent in the previous session.
“The weakness that we are seeing in oil prices in morning trading today likely reflects the markets realizing that these cuts are largely priced in,” ING analyst Warren Patterson said in a note.
Both contracts jumped more than 8 percent the previous week, buoyed by optimism over demand recovery in China, the world’s top crude importer and No. 2 oil consumer after Covid-19 curbs were scrapped in December.
China’s oil demand recovery curbed its gasoline exports in February, although its refiners maintain diesel shipments at above 2 million tonnes.
Stefano Grasso, senior portfolio manager at 8VantEdge in Singapore, said that the 500,000-bpd cut would bring Russia back in line with its OPEC+ quota as Moscow is currently over-exporting.
