Oil drops as EU considers $65-70 Russian price cap

Oil slumps in European trade today on reports that the European Union is considering setting a price cap on Russian oil in the $65-70 per barrel range. Such a decision would be in-line with yesterday's media reports saying that the price cap could be set at $60 per barrel or even as high as $70 per barrel. However, disagreements among EU member countries remain and the decision on price cap needs to be unanimous if the EU is to embrace it. Interestingly, $65-70 per barrel cap would not cap prices of Russian oil as Russian Urals benchmark is currently trading at a discount of over $20 per barrel compared to Brent benchmark. However, if implemented, it would cap the price of Russian oil in case of potential price increases.

WTI (OIL.WTI) dropped and tested a support zone in the $80 area, following media reports on a potential $65-70 price cap on Russian oil. Source: xStation5