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Showing posts from March 20, 2022

Uncertainty in Crude Oil Markets: Russia's demand of payments in roubles makes matters worse!

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  No sooner had the West and its staunch allies imposed crippling sanctions against Russia over its invasion of Ukraine than the latter published a list of 'unfriendly' countries.  They include the European Union, the UK, Japan, South Korea, Switzerland, Singapore and of course, the US. Having endured the impact of the sanctions for a few weeks, Russia seems to have decided to hit back without resorting to the worst case scenario that the most Europeans feared in retaliation - completely cutting off the gas supply to the European states. Although European winter is now over, such a move a few weeks ago would have been disastrous for the Europeans, as the tail end of the winter is always very cold in the region. Instead of going for the much dreaded 'nuclear option', Russia seems to be determined to adopt a 'milder' form of retaliation; it wants the unfriendly nations to pay for gas in its national currency, roubles - not in euros or US dollars; Russia says it wi

Government of the UK cuts the fuel duty by 5p

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  Rishi Sunak, the Chancellor of the Exchequer of the United Kingdom, reduced the fuel duty by 5p while presenting his Spring Statement in the Parliament today. The price of crude oil, however, did not immediately come down after the announcement. On the contrary, the prices of crude oil went up - actually. As of 14:15 GMT, the price of WTI and Brent were trading at $114.04 and $120.67 respectively; the price of LNG was at $5.25. Undoubtedly, the oil companies will come under pressure to pass on the savings to the beleaguered customers; the British government has been compelled to take the measure at a time when the inflation has hit 30-year high, with the price of oil at the pumps are rising fast triggering off a cascade of disturbing economic spectre. It is not just the government in the UK that feels the pinch; it is just universal regardless of the relative economic strength of the country in question. The us crude oil inventories, meanwhile, has fallen last week accordin