Oil prices: Will a Russian price cap be approved? How will the China virus affect demand?

Oil prices were about the same as traders waited to see if a plan to cap Russian crude prices would be approved, and considered the effect of the virus outbreak in China on demand.

Oil prices were little changed on Wednesday, as traders awaited the potential approval of a plan to cap Russian crude prices and weighed the demand outlook in virus-hit China. Some analysts believe that a price cap on Russian crude would help to ease global oil markets, as it would provide a floor for prices.

As oil prices continue to fluctuate, the European Union is considering implementing a price cap on Russian oil exports. This would help to stabilize prices and ensure that consumers are not paying too much for gasoline and other petroleum products. However, it is not yet clear if this measure will be approved or not.

The European Union is considering imposing a price cap of $65-$70 on Russian oil, in an effort to protect European consumers from high energy prices.

Russia has said that it won't sell crude to nations that use the cap, which is designed to punish Moscow for its invasion of Ukraine while keeping the nation's oil flowing. However, many experts believe that this move by Russia is more posturing than anything else, and that the country is not likely to follow through on its threats.

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Although it is not yet clear exactly how much oil production will be cut under the new OPEC agreement, it seems that it will be similar to the levels that Russia is currently producing. According to Warren Patterson, head of commodities strategy at ING Groep NV, this is not likely to have a big impact on the market, since it is more important to see how Russia reacts to the agreement.

Crude prices have trended lower this month amid concern that demand in China, the world’s largest importer, will be hurt as the country presses on with Covid Zero curbs. Beijing asked residents not to leave the city unless necessary to curb the spread of the virus. However, analysts believe that the country will eventually get the virus under control and that demand for crude will rebound.

The American Petroleum Institute (API) reported that US crude stockpiles shrank by 4.8 million barrels last week. This is good news for the oil industry, as it indicates that demand is remaining strong despite the current global economic conditions. The API's figures also showed a drop in inventories at the key Cushing, Oklahoma storage hub. Government figures on supply and demand are due to be released later today.