Crude oil is the biggest mover in the commodities markets.
WTI crude is up 1.0% to $US102.19/barrel and Brent crude is up 0.6% to $US107.81/barrel.
The moves come in the wake of new U.S. sanctions against Russian financial and energy firms including Rosneft, the world’s largest publicly-traded oil company.
Rosneft produces 4.2 million barrels of oil per day.
Energy experts seem to agree that the sanctions really aren’t that big of a deal.
“OPEC will step up and export more to replace the lost Russian crude and calm these oil-price spikes,” said Nomura’s Gordon Kwan via Bloomberg. “The U.S. and EU are smart enough not to risk derailing the global economic recovery by choking off Russia’s oil exports.”
That seems obvious. No one wants to shoot themselves in the foot.
“OPEC’s spare capacity is estimated at 3.25 million barrels a day, the International Energy Agency said in its monthly report on July 11,” reported Bloomberg’s Ben Sharples. “Russia exported about 6.14 million barrels a day of crude in May, said the Paris-based agency, an adviser to developed nations. Commercial oil inventories held by members of the Organisation for Economic Cooperation and Development rose by 44.2 million barrels in May to 2.639 billion, its report shows.”