Oil shares remain resilient; crude oil prices are falling but remain at high levels
On Friday, Trump suspended certain sanctions against Russia, a decision that could lead to an increase in Moscow’s fuel exports
Le ultime da Radiocor
***Ue: da Governo italiano ok alla proposta di tenere summit di marzo a Roma
Borsa: Europa in rosso a meta' seduta, le banche pesano su Milano (-1,5%)
***Tlc: DT, Orange, Telefonica e Vodafone insieme in gara Ue per frequenze satellitari
(Il Sole 24 Ore Radiocor) - Against a market backdrop almost entirely in the red, oil stocks are standing out on the Milan Stock Exchange, with the price of oil remaining at high levels despite a downward trend. Consequently, Eni and Tenaris, ranking among the top performers on the FTSE MIB. As mentioned, oil prices have lost ground from the five-month highs reached on Friday: Brent crude has slipped to $106.9 per barrel, having reached its highest level since 19 May during the final trading session of last week, whilst WTI is trading lower at around $99, having fallen from the high of 17 September reached on Friday.
And just last Friday, the US President, Donald Trump, signed an executive order suspending some of the main sanctions and tariffs imposed on Russia under the Graham Act, a decision that could lead to an increase in Russian fuel exports. According to many experts, the president’s move is a desperate attempt to keep crude oil prices in check ahead of the mid-term elections, although the lack of details on the measure is preventing the market from pricing in a lasting increase in supply. This exemption comes after Trump reached an agreement with Russian President Vladimir Putin to export diesel to the United States and other countries, with initial volumes of around 2.3 million barrels this month, set to rise to around 7.6 million barrels per month.
Furthermore, the market is “wary of a further escalation of hostilities in the Middle East”, according to analysts at ANZ Research. Indeed, tensions in the Strait of Hormuz continue, with the intensification of attacks on commercial vessels having drastically reduced crude oil flows from the Gulf. According to Kepler, last week oil flows fell to around 8.5 million barrels per day, compared with over 20 million barrels per day the previous week. Against this backdrop, Egypt has declared that it is ready to provide Saudi Arabia with the necessary support to defend itself against Yemen’s Houthis, who are allied with Iran, thereby fuelling tensions in the region once again.
