RIYADH: Brent oil fell on Tuesday, reversing the previous day’s gain, as fears that a global economic slowdown, and drop in fuel demand, amid aggressive interest rate hikes by the US central bank prompted investors to take profits.
Brent crude was down $1, or 1.19 percent, at $83.07 a barrel at 08.37 a.m. Saudi time. US West Texas Intermediate crude for March, which expires on Tuesday remained stable at $76.34.
Kazakh oil decouples from Russian crude but risk weighs on price
Kazakhstan has separated its oil exports from those of Russian crude by launching its own 'Kazakhstan Export Blend Crude Oil' brand, but sanctions against Moscow are still putting pressure on the price of Kazakh oil pumped through Russian pipelines, data shows.
The Central Asian nation launched KEBCO last June to distance its exports from the Russian Urals blend amid Western sanctions.
The export route via the Russian port of Ust-Luga has long been a secondary one for Kazakhstan which ships most of its crude through the Caspian Pipeline Consortium, but it is an important option for many Kazakh producers.
Although physically the Urals and KEBCO blends are the same, Urals now trades at a $30 discount to Brent, while KEBCO is about $20 more expensive than Urals.
That still leaves a sizeable discount to Brent which market players say is due to a number of sanctions-related factors: traders are cautious about buying from Russian ports, some vessels avoid them altogether, and freight and insurance have become more expensive.
Saudi energy minister says OPEC+ decisions not politicized
Decisions by the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, are not politicized and are based on market fundamentals, Saudi Arabian energy minister Prince Abdulaziz bin Salman said on Monday, adding that the alliance of oil producers is sufficiently flexible to adjust policy as needed.
Prince Abdulaziz was speaking at a media forum in the capital Riyadh about last October’s decision to cut the group’s production target by 2 million barrels per day.
Earlier in December, OPEC+ agreed to maintain the status quo on output.
In October, OPEC+ had agreed to cut output by 2 million barrels per day, which equals to about 2 percent of world demand, from November until the end of 2023.
Prince Abdulaziz reiterated in an interview with Energy Aspects last week that the decision was locked in for the rest of the year.
(With input from Reuters)
