26 December 2022 | Macroeconomics

Oil rose for the second week in a row, Russia warns of production cuts

Responding to the sanctions, Russia warned about a possible decrease in oil production by almost 700,000 barrels per day. After that, the price of oil reached a three-week high. The increase in the price of oil continues for the second week in a row.

A price cap on Russian oil was accepted in order to maintain the volume of supply and to reduce Russia's revenues. The G7 countries fixed prices at $60 per barrel.

Cold weather covers the U.S., Russia's scare outweighs the effects of winter frosts. Because of the cold weather, crude oil production in North Dakota slowed by as much as 350,000 barrels a day, and on the Gulf Coast in Texas, refining capacity halted by one-third.

Gasoline futures rose to their highest level in three weeks since the refinery shutdown. On the Gulf Coast, gasoline reserves are at record highs for this time of year. Diesel reserves are also above normal. This is a good level for supply.

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