Oil stable as news moves the market up and down

Oil benchmarks were mixed yesterday, they started moving up, the Brent reached $106.35/b, then the market made a U-turn and Brent touched $103.27/b to end the day at $105.32/b gaining less than 0.01%. NYMEX WTI front month followed a similar path to close stable at $102.2/b.

At first it was the Russian decision to stop delivering gas to Poland and Bulgaria that pushed prices up as it showed the Russian government could be ready to halt exportation of other energy products. However, the trend was reversed as the USD became stronger (see macro comment) making oil purchase more expensive for non-USD holders.

When the EIA released the weekly petroleum status report prices moved up as crude inventory increased by 692kb, that is slightly below expectations and because petroleum product inventories continued to drop under a low refining capacity decreased and massive exports (in particular of diesel)to Europe. US crude production remained stable.

This morning, oil is trading lower as dollar continues to rise and because some European energy companies are working to accept Moscow requirements to pay gas delivery in RUB.