London, Tuesday, 31 May 2022
Investors reacted to headlines suggesting that OPEC is considering suspending Russia's participation in the cartel, which could allow other producers to pump more crude into markets.
WTI crude futures bottomed around $115 per barrel, a dramatic reversal from daily highs of nearly $120, as investors reacted to headlines suggesting that OPEC is considering suspending Russia's participation in the cartel, which could pave the way for other producers to pump more crude into markets.
The market's reaction contrasts with the optimistic feeling that prevailed for the majority of the session after EU leaders agreed to ban 90% of Russian crude by the end of the year.
The embargo covers Russian oil imported by sea, with a temporary exemption for pipeline crude to pacify nations like Hungary, which were opposed to a blanket prohibition.
Despite this, WTI oil is on track for its sixth month of rises, the longest such stretch in more than a decade, due to constrained supply resulting from Russia's invasion of Ukraine at a time when economies were ramping up consumption following the lifting of coronavirus-related restrictions.
(Written and edited by: The Decision Maker)
