Crude oil prices started the week with a drop of about one percent as traders were still watching what happens in Syria next and despite the announcement that Washington will impose new sanctions on Russia for its support of Syrian President Bashar Assad.
At the time of writing, Brent crude traded at US$71.87, down by 0.98 percent from Friday’s close, and West Texas Intermediate was down 0.85 percent to US$66.82 a barrel, after on Sunday the US Ambassador to the UN Nikki Haley said Washington would announce the third round of sanctions against Russia today.
Speaking on “face the Nation” on CBS, Haley said “Secretary Mnuchin will be announcing those on Monday if he hasn't already and they will go directly to any sort of companies that were dealing with equipment related to Assad and chemical weapons use. And so I think everyone is going to feel it at this point. I think everyone knows that we sent a strong message and our hope is that they listen to it.”
Perhaps market participants are waiting for the actual announcement before they decide whether it is time to panic or not, or perhaps the effect of any Syria-related news has lost its edge for oil prices after the strikes carried out by the U.S., the UK, and France over the weekend failed to spark what many worried would be World War Three.
Meanwhile, GE’s Baker Hughes added its own headwind for oil benchmarks, saying U.S. drillers installed seven more of these in the week to April 13, bringing the total to 815. That’s 132 more than this time last year, suggesting U.S. oil production will continue to rise, perhaps even faster, as this was the second consecutive week with rig additions.
Last week, the Energy Information Administration reported that production had hit another record, at 10.53 million bpd in the week to April 6, up from 10.46 million bpd a week earlier.
By Irina Slav for Oilprice.com
