Crude rallies as EU unveils plan to ban Russian oil imports
The plan will see Russian supply of crude oil phased out within six months and crude products by the end of the year
Share this:
Oil prices have climbed around 2.7% so far in the session after the EU announced a phased embargo on Russian oil earlier. The plan, which needs to be ratified by all 27 EU member states, will see Russian supply of crude oil phased out within six months and crude products by the end of the year. This is part of the sixth round of sanctions on Russia due to its ongoing invasion of Ukraine and will include fresh sanctions on the country’s top bank: Sberbank is to be excluded from SWIFT.
Given the relatively small rise in Brent compared to the recent volatility of oil prices, it looks like the markets are not convinced all EU member states will approve the plan, as clearly some rely heavily on Russian oil. Indeed, Hungary and Slovakia will be excluded and will be given more time to find alternative sources for their oil needs. But this means that countries in the EU will still be able to purchase Russian oil via Hungary and Slovakia at least until the end of 2023. As a result, the damage to Russian oil exports will not be as severe as the EU hopes.
Still, the EU might be able to convince its members to ratify the plan, and prevent Hungary and Slovakia to buy more oil than they need. If so, this will have a huge impact on Russian oil exports. And given the difficultly the OPEC has had in raising its oil output of late, the market is therefore likely to remain tight for a while yet. Oil prices will thus remain supported on the dips, hurting consumer incomes and underpinning inflationary pressures.
In fact, it looks like Brent may have formed a base around $100.00 after spending several weeks in consolidation above this psychologically important level and its 21-day exponential moving average. If it manages to break cleanly above the trend line shown on the chart, then prices may find a new range between $110 to $120 per barrel.
Source: StoneX and TradingView.com
Meanwhile, the focus of oil markets will turn to the OPEC+ meeting on Thursday. Stay tuned for our preview.
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the pair you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Source: StoneX and TradingView.com
Meanwhile, the focus of oil markets will turn to the OPEC+ meeting on Thursday. Stay tuned for our preview.
How to trade with City Index
You can trade with City Index by following these four easy steps:
- Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Dow Jones Forecast: DJIA rises after weaker jobs data
U.S. stocks are rising after weaker-than-expected U.S. jobs data saw markets rein in rate hike expectations.
Nasdaq 100 Forecast: NDX slips as Treasury yields keep rising
U.S. stocks are falling at the start of Q4, as gains in software stocks offset concerns over soaring Treasury yields. U.S. Treasury yields continue to rise, with the 10-year yield up 2 basis points at 5.31% and the 30-year at 5.66%, multi-decade highs.
S&P 500 Forecast: SPX rises after cooler-than-expected inflation data
U.S. stocks are rising and Treasury yields are falling after data showed that inflation increased at a cooler pace than expected, while U.S. consumer spending rose again in August.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.