Crude prices were marginally lower today after early gains were erased on indications that Russian crude shipments via the southern leg of a major pipeline to Europe may resume in a few days after being suspended.
“Energy traders faded the rally that stemmed from the halting of oil shipments because it wasn’t triggered by an escalation from the Russians,” said Ed Moya, senior market analyst at Oanda Corp.
"Europe is going to figure out how to allow the payments that were behind that disruption," he added.
Also weighing on trading is the potential return of Iranian oil to the market. The US and Iran have just weeks to decide whether they want to revive their nuclear deal, after European Union diplomats presented parties with a final draft accord.
But for now, the inventory issues remain top of mind...
Crude +2.156mm (-400k exp)
For the 2nd straight week, API reports a crude inventory build (despite expectations of a small draw)...
WTI was hovering around $90.60 ahead of the API data and dipped on the crude draw...
The halt in Russian flows “is a reminder of the global supply fragility,” said John Kilduff, founder and CEO of Again Capital. “Concerns over the global economy remain a significant headwind, however. There is no room for error, in terms of supplies, or additional disruptions,” he added.