Russian Urals Crude Prices Reached Lowest Level in Ten Months
The recent decline in Russian Urals crude oil prices was the lowest level it attained since May last year. The decrease was caused by weak demand from regional refiners and sufficient supply.
In the past months, Urals has been strongly supported because it was considered as a good substitute for the grade of oil produced by Iran. Consumers have found Iranian oil to be increasingly hard to purchase because of tight sanctions imposed on the country.
But high crude prices have affected the profits of regional refiners at present which led to significantly lower demand. Also, current crude oil prices are currently beginning to feel the impact of the weak demand.
The oil from Russia recently traded at its lowest level in ten months, the last period of a publicly traded cargo. The crude price weakened to $3.25 lower the main benchmark Brent crude. According to traders and analysts, this pressure may possibly remain.
JBC Energy stated in a note that pressure coming from the region’s refinery maintenance is not expected to significantly ease in the next month.
A minimum of 230,000 barrels daily of Mediterranean’s refining capacity will be inactive due to the maintenance set in April and about 500,000 barrels daily in Europe’s Northwestern regions will be offline said JBC estimates.
Furthermore, additional cargoes coming from the new port of Baltic may possibly affect prices as soon as it opens in the latter parts of the month. According to shippers, the first tankers were anticipated to leave the port as soon as possible.