World (Times Of Ocean)- Oil prices edged higher on Wednesday following a proposal for more sanctions on Russia, despite concerns over demand following a lockdown in Shanghai’s financial district, along with a rise in the US dollar index making dollar-priced oil more expensive.
Brent crude was trading at $106.95 per barrel at 0708 GMT, up 0.29% from its previous closing price of $106.64.
American benchmark West Texas Intermediate (WTI) closed at $101.98 a barrel at the same time, up 0.02% from the previous session’s closing price of $101.96 a barrel.
To fuel supply fears on the market, the EU Commission introduced its fifth package of sanctions on Russia in response to the Ukrainian crisis.
The package will include an import ban on coal from Russia worth €4 billion ($4.3 billion) per year, thus cutting off another important revenue stream for Russia.
The package also includes a ban on Russian vessels and Russian-operated ships from entering EU ports in addition to the ban on four key Russian banks. The commission said sanctions on Russian oil would be debated, but the block is currently highly dependent on Russian gas and oil.
“One idea being floated is a tax or tariff on Russian oil imports to increase their price and reduce demand,” said ANZ commodity strategist Daniel Hynes.
In response to the war in Ukraine, the US has confirmed that it will announce additional sanctions against Russia on Wednesday in coordination with its allies in Europe.
Russian government officials, their family members, Russian-owned financial institutions, as well as state-owned enterprises will be targeted by the measures.
A series of photos and videos showing mass killings in the Ukrainian city of Bucha, which has been deemed “genocide” by several countries, have led to the latest round of sanctions. Bucha was occupied by Russian forces until they retreated on March 30.
Exxon announces record quarterly profits from oil and gas prices
On Monday, Exxon Mobil Corp (XOM.N) said its first-quarter results were likely to break a seven-year quarterly record, with operating profits from drilling for oil and gas alone topping $9.3 billion.
According to a report on the largest U.S. oil company’s quarter ended March 31, operating profits from oil and gas, its biggest division, could rise up to $2.7 billion from last quarter’s $6.6 billion.
Exxon does not hedge or lock in oil sales, and its results generally follow changes in energy prices. Russia’s invasion of Ukraine pushed oil prices up by 45% last quarter, to an average of $114 per barrel, the highest in seven years.
Scotiabank global equity research estimates total earnings for the quarter of about $9.8 billion at the midpoint of Exxon’s estimates.
Shares of Exxon, which have gained 36% year to date, rose to $83.16 on Monday. Official results will be announced on April 29, according to a securities filing.
According to Scotiabank analyst Paul Cheng, adjusted earnings should be around $2.29 per share. This would be Exxon’s highest quarterly profit since at least 2014.
Blockbuster oil and gas profits provide a preview of what’s to come for other oil companies. U.S. and European Union lawmakers may be strengthened in their calls for windfall profit taxes on energy companies based on these results.