Crude oil prices dropped Thursday after trading in a tight price range much of the day, Kallanish Energy reports.
Brent crude earlier topped $75 per barrel for the first time in nearly six months, as quality concerns stopped some Russian crude exports to Europe, and the U.S. prepared to tighten sanctions on Iran.
Wednesday’s report of a larger-than-expected build in U.S. crude inventories last week — to their highest volume since October 2017 – weighed on West Texas Intermediate crude.
WTI settled 68 cents lower Thursday, at $65.21/Bbl, down 1% and further from this week’s 2019 high of $66.60/Bbl. Brent crude futures fell 22 cents, to $74.35/Bbl, breaking four days of price increases. Brent earlier hit a session high of $75.60/Bbl, the strongest since Oct. 31.
Poland and Germany suspended imports of Russian crude via the Druzhba pipeline due to contamination. The pipeline can ship up to 1 million barrels per day (Mmbpd), or 1% of global crude demand. Roughly 700,000 Bpd of flow was suspended, according to trading sources and Reuters calculations.
U.S. attempts to drive Iranian oil exports down to zero also boosted prices. The U.S. this week said it would end all exemptions for sanctions against Iran.
The Middle East country has been under U.S. sanctions for more than six months, but several major Iranian crude importers, led by China and India, were given 6-month exemptions, which expire May 1.
The U.S. decision comes amid supply cuts by Opec+, the group of producer-countries which includes most Opec members, along with a number of other producers, led by Russia.
Opec+ members agreed through at least the first six months of 2019, to cut 1.2 Mmbpd from the international market to prop up prices.
Analytics/consulting firm Rystad Energy said Saudi Arabia and its allies could replace lost Iranian oil.
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