On Thursday, oil prices fell after TC Energy Corp’s Keystone pipeline resumed operation and following a report of an increase in the US crude inventory.
The West Texas Intermediate (WTI) futures for January delivery plunged by 0.78% to $76.68 per barrel on December 15.
Likewise, Brent contracts for February distribution dropped by 0.65% to $82.16 a barrel on Thursday trading.
This bearish momentum is attributed to the reopening of a major section of the Keystone Pipeline after an oil spill in Nebraska that resulted in a shutdown last week.
Another factor that caused the bearish momentum was the report from the US Energy Information Administration regarding a large crude inventory in the US.
According to the agency, they recorded 10.20 million barrels of oil in the week that ended on December 09, compared to the 5.20 million barrels in the previous week.
Meanwhile, some analysts predicted that crude prices would rally next year due to the price cap sanctions for the Russian supply.
Furthermore, China is rapidly relaxing its strict Covid-policies, indicating a positive outlook for commodity demand.
Hence, the market may see an upward momentum in the price in following days.
Russia Sold Oil to India Below the Price Cap
In December, Russia sold its oil to India below the price cap after the European Union enforced the ban on its crude imports.
Recently, the Group of Seven nations implemented the $60.00 price cap on Moscow’s black gold to curb its ability to finance the war efforts against Ukraine.
As a result, Russia’s oil revenue will likely suffer as the sanctions would force the nation to lower the prices to attract buyers.
Consequently, the International Energy Agency (IEA) expects the country’s crude earnings to be about $15.80 billion in November, the second lowest since the $14.70 billion in September.
Moreover, the agency predicts Moscow’s output to fall by 1.40 million barrels per day next year.
Despite this, Russia’s President Vladimir Putin believes that the price cap would not hurt the country’s economy.
