Russia EU Ban, page-207

Strong increase in oil prices are very likely in the northern winter (& China is now relaxing covid controls= more economic growth. This will also ,likely, increase its demand for energy- & much increased oil, gas ,& thermal coal imports).

It should be noted that, In the EU & USA, oil is commonly used for heating, in their very cold winters. As oil becomes expensive, a switch to electric powered heating is likely- so more demand for cheaper, reliable coal-fired power there.

Bodes well for WHC SP growth.

I. Slav , 8.11.22, said

"Less than a month from now, an embargo on seaborne Russian crude oil exports to the European Union will come into effect. As a result, global oil supply is set to tighten considerably as Russia is the biggest oil and fuels exporter in the world. And the market is preparing.

HEDGE funds once again like oil, and are buying it on the futures market in CONSIDERABLE volumes,accordingto Reuters’ John Kemp. Last week, the buying reached 22 million barrels of Brent crude and 15 million barrels of West Texas Intermediate...

Yet, with an EU embargo and a G7 price cap, what will almost certainly happen by the end of the year is that oil will become MORE EXPENSIVE than it is now. Perhaps more worryingly, fuels - especially diesel - will become more expensive as the supply of crude oil tightens further while no new refineries are on the horizon.

The fuel situation is going to become a lot more complicated in February, too, when the EU’s Russian fuels embargo comes into effect. Currently, the European Union is importing some 400,000 barrels daily of Russian diesel, according to a Wall Street Journalreport, as well as 1.7 million barrels daily of diesel from other suppliers. This 400,000 bpd will need to be replaced come February 5. And it will fuel higher inflation.

“Europe’s going to pay whatever these producers ask, and it’s going to be very, VERY HIGH,” Benedict George, head of diesel pricing at Argus Media, told the WSJ. “If something unexpected happens, the price will go very high, very quickly because no one has anything to fall back on.”

Indeed, distillate stocks (in storage) are below historic averages across regions, notably in the United States, which is also a major exporter of oil products to the European Union. This means prices will remain elevated because the only new refining capacity is in the Middle East and China, and it is limited. Demand for diesel fuel, on the other hand, is consistently strong because the fuel is used across the world for freight transport...

There is also the OPEC+ production CUT to consider when looking ahead to the next couple of months in oil. Some expect that the anti-Russian oil embargo will lead to a decline of about 1 million bpd in global supply. OPEC+ is cutting another 1 million bpd from its collective production. That’s 2 million bpd in lower oil supply at a time when production growth in the U.S. shale patch is alsoslowing down". (My emphases, & words in brackets.)

https://oilprice.com/Energy/Energy-General/Oil-Prices-Are-Primed-To-Spike-This-Winter.html