- Oil prices extended losses this morning, with the prompt contract falling below $85/bbl for the first time since January
- Prices were impacted by China's renewed Covid lockdowns, persistent worries over an economic slowdown, and a stronger dollar
- The USD Index (DXY – a proxy for USD strength against a basket of other int’l currencies) is up by over 30 pips over the last two days, printing around 1.0% higher at 110.70. The DXY index is now trading near its highest level since 2002
- The Cal '22, '23, and '24 WTI swap prices are currently trading $1.39, $1.18, and $0.98 lower near $84.64, $79.53, and $72.89
- Russian President Vladimir Putin threatened to stop energy supplies if price caps were imposed on Russia's oil and gas exports (Reuters)
- Today, Putin addressed an economic forum in Vladivostok and said that Russia would cancel its supply contracts if a price cap is imposed
- He added, "We will not supply gas, oil, coal, heating oil - we will not supply anything"
- Europe usually imports about 40% of its gas and 30% of its oil from Russia
- The comments came after the G-7 nations agreed to impose a cap on Russian oil Exports last week to restrict Russia's revenues
- China's crude oil imports rose to a three-month high in August, with a significant month-to-month increase (BBG)
- The nation imported 9.54 MMBbl/d of crude in August, 8% more than in July, according to data from the General Administration of Customs
- Analysts partly attributed the rise in August inflows to refiners refilling inventories after the summer and in preparation for the winter
- However, domestic demand in the upcoming months is still uncertain because Covid lockdown measures are threatening China's oil demand