International crude oil defies US sanctions, prices cool off after 5% surge

New Delhi [India], October 24 (ANI): International crude oil prices traded largely range bound Friday, oscillating between marginal gains and losses, with analysts attributing them to mild profit booking.

The analysts also ruled out any panic among global oil buyers even as the US administration tightens grip on Russia, a key supplier of energy world over.

At the time of filing this report, Brent oil futures were trading at USD 66.19 per barrel, up 0.3 per cent, against marginally low an hour ago. Similarly, WTI oil futures were at USD 62.00 per cent, up 0.36 per cent, versus a tad low moments ago.

On Thursday, oil prices rose more than 5 per cent on Thursday.

According to SBI Securities, Brent crude surged by 5 per cent following reports that China's state-owned oil companies have halted their purchases of seaborne Russian oil in response to the sanctions imposed by the United States on Russian oil firms Rosneft and Lukoil.

By far this week, they (Brent oil futures) soared about 8 per cent, cumulatively, and are on course for their strongest weekly gain since June as fresh US sanctions on major Russian producers invariably caused supply concerns.

Russian President Vladimir Putin has described the latest US sanctions as an "unfriendly move" that would not help relations between Moscow and Washington. He said the new restrictions would have little effect on Russia's economy, adding, "no self-respecting country ever does anything under pressure, " Russia Today had reported.

The Russian leader also noted that Moscow and Washington "have many areas in which they could cooperate" if both sides moved away from pressure tactics and engaged in "serious conversations about the long term."

The sanctions freeze all US-based assets of both companies and prohibit American citizens and entities from doing business with them. According to the US Treasury Department, the move aims to limit Russia's ability to fund its war operations and further weaken its economy, as per Russia Today.

Rahul Kalantri, VP Commodities, Mehta Equities ltd, said, "The sanctions against Rosneft and Lukoil, which together represent nearly half of Russia's oil exports, prompted Chinese state-owned companies to suspend seaborne purchases and led Indian refiners to cut imports."

"Additionally, EU sanctions on Russian energy infrastructure and continued Ukrainian attacks on refineries and pipelines heightened fears of supply disruptions, marking WTI's strongest weekly gain since early June," Kalantri added.

He expects crude oil prices to remain volatile in today's session. Crude oil is having support at USD 60.50-59.70 and resistance is at USD 62.00-62.70 in today's session.

In Rupee terms, crude oil has support at Rs 5,360-5,260 per barrel while resistance is at Rs 5,485-5,535 per barrel, Kalantri said.

Axis Securities, in its Commodity Morning Insights report Friday, asserted that crude oil prices surged after President Donald Trump suggested that India may halt purchases of Russian oil and hinted at a possible US-China meeting that could ease trade tensions. According to Axis Securities, these are factors that are likely to boost global demand prospects for crude. (ANI)

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