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Business Energy

Oil posts second weekly gain as Russia warns of output cut

Moscow said it could cut crude output in response to the G7 price cap on Russian exports



Russia may cut oil output by 5% to 7% in early 2023 as it responds to price caps, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying on Friday.
Image Credit: Reuters

Dubai: Oil rallied to a three-week high and clinched a second straight weekly gain after Russia warned it may cut output by as much as 700,000 barrels a day in response to sanctions on the nation’s crude.

With trading volumes dwindling heading into the Christmas holiday, Russia’s threat outweighed the impacts of a winter freeze sweeping across the US. The cold has halted one-third of refining capacity on the Texas Gulf Coast and as much as 350,000 barrels a day of crude output in North Dakota.

Gasoline futures also rose to the highest in three weeks following the refinery outages, though supply is in good shape: Gulf Coast gasoline stockpiles are at a record high for this time of year, and diesel inventories are above normal as well.

Crude is still on track for a modest yearly gain after a volatile year where Russia’s attack on Ukraine upended oil markets. The invasion led Group of Seven countries to imposed a $60 a barrel price cap on Russian crude in an effort to reduce the Kremlin’s income while keeping exports on the market.

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