Oil Surges on Expected Russian Export Drop, Offsets U.S. Storm Hit

Oil prices went up on Friday as traders anticipated weaker Russian crude exports from the Baltic region in December, balancing concerns that a coming Arctic storm across the United States could snuff off holiday fuel demand growth.

Brent crude rose 70 cents, or 0.86%, to $81.68 a barrel by 10.02 A.M. (Thai time), while U.S. West Texas Intermediate crude was at $78.33 a barrel, up 84 cents, or 1.08% higher.

After the European Union and G7 nations announced sanctions and a price ceiling on Russian crude as of December 5th, traders and Reuters calculations suggest that Russian oil exports might drop by 20% from the previous month.

“Crude prices are higher as energy traders focus on Moscow’s response to the price cap put on Russian oil and not so much the thousands of flight cancellations that will disrupt holiday travel,” OANDA analyst Edward Moya said.

Oil prices on both sides of the Atlantic ended down on Thursday as many flights were canceled in the United States due to a winter storm. The snowstorm may prevent people from traveling at Christmas and New Year, which would reduce demand for oil.

However, because the bad weather is predicted to create power disruptions, heating oil demand may increase.