Oil prices edged lower on Thursday, hovering near two-month lows, as the G7’s proposed price cap on Russian crude was seen as higher than current market trading levels, easing supply concerns.
Brent Crude futures were down 0.3% at $85.20 a barrel, while West Texas Intermediate (WTI) crude futures were down 16 cents at $77.78 a barrel.
Both benchmarks fell more than 3% on Wednesday on news that a planned ceiling on Russian oil prices could be higher than current market levels.
According to a European official, the G7 is considering a cap on Russian offshore oil at $65-$70 a barrel, although European Union governments have yet to agree on a price.
The $65-$70 range will be higher than markets expected, Commonwealth Bank commodities analyst Vivek Dhar said in a report. According to Dhar, this will reduce the risk of global supply disruptions.
‘If the EU agrees to cap oil prices at $65-$70 per barrel this week, we see downside risks to our $95 per barrel forecast this quarter,’ Dhar said.
According to him, according to the forecast of the Commonwealth Bank, the EU sanctions, which are accompanied by a cap on Russian oil prices, will disrupt enough supplies to offset the current fears about the growth of the world economy.
According to traders, some Indian and Chinese refineries are paying prices for Urals oil below the proposed ceiling level. Urals is Russia’s main oil export.
According to EU diplomats, EU governments will resume negotiations on the price ceiling on Thursday or Friday.
