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 invasion of 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.
- WTI for February delivery settled $2.07 higher at $79.56 a barrel
- Brent for February settlement rose $2.94 to $83.92 a barrel