Russian shipments through Druzhba pipeline to Hungary start again: Report
According to credible reports, the prices of oil recently dropped by more than a USD (U.S. dollar) as Russian oil shipments via the Druzhba pipeline to Hungary were restarted, while surging cases of COVID-19 cases in China weighed on sentiment.
It has been disclosed that the U.S. WTI (West Texas Intermediate) crude futures fell 2.5% or $2.20, to $84.72 a barrel, whereas Brent crude futures slid 1.8%, or $1.73, to $92.13 a barrel by 11:14 am EST (1614 GMT).
The market was also reinforced by a larger-than-expected fall in the U.S. crude stocks.
Apparently, the Energy Information Administration also stated that the U.S. crude inventories fell by 5.4 million barrels, compared to the expected drop of 440,000-barrel.
Imperative to note that both crude benchmarks observed a steep rise earlier in the session sharply following a tanker hit off the coast of Oman recently, sustaining minor damage whilst emphasizing the geopolitical risks in the busiest routes of the world for oil shipments.
Speaking on the latest move, Matt Smith, oil analyst at Kpler, mentioned that several geopolitical influences, like an oil tanker being hit by a bomb-carrying drone off the coast to Oman along with Russia tensions have been largely dismissed.
Matt further added that this had been done owing to the shifting focus on more bearish elements, including weak Chinese economic data and demand.
Apparently, the prices retreated by over 2% following the announcement made by the Hungarian Foreign Minister Peter Szijjarto regarding the resumption of the oil pipeline from Russia after a brief outage.
According to oil pipeline operators in Slovakia and Hungary, oil supply to some parts of Central and Eastern Europe via a section of the Druzhba pipeline was temporarily paused due to technical issues.
Moreover, despite this week's easing of virus restrictions, COVID-19 cases have continued to rise in China.
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Saipriya Iyer
Saipriya Iyer currently works as a content developer for AlgosOnline. A computer engineer by profession, she ventured into the field of writing for the love of playing with words. Having had a previous experience of 3 years under her belt, she has dabbled with website content writing, content auditi...