Price Performance Indicators

• In a week (5/12 - 9/12) the price of ICDX’s crude oil edged down 3.23 percent.   
• The highest volatility reached 1.41 percent. 

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Market Review

The price of the ICDX oil contract during the week was fallen more than 7 percent for the closing week ending 9 December. The sentiment driving the decline is the uncertainty over the effect on global oil markets cause by the European Union (EU) embargo on Russia and the EU and G7 restrictions on Russian oil prices. The members of G7 and EU have agreed on a temporary $60 per barrel price cap for Russian oil, to be reviewed by the EU and G7 every two months, with the first review in mid-January. The price limit was applied simultaneously with the effective date of the embargo for oil exports by sea on Monday (5/12).

Meanwhile, the Chinese government's seriousness in carrying out a major overhaul of the Covid policy has strengthened after the National Health Commission on Wednesday (7/12), allowed Covid patients asymptomatic and those with mild symptoms to be quarantined at home.

Another positive sentiment came from the news that the loading of oil from Russia's Black Sea port of Novorossiisk was forced to be pushed back from schedule due to the storm, and bad weather also caused two ships that arrived last month to load before the December 5 starting price cap was not reached, sources said on Tuesday. Thursday (8/12). These adverse weather conditions have the potential to cause longer delays, and add to further fears of supply disruptions to global markets.

Market View

Turkey's New Insurance Rules Trigger Tanker Queues

Along with imposing an embargo and price cap on Russian oil, the Turkish government implemented new insurance rules starting December 5. As a result there was a queue of at least 20 oil tankers in the Bosphorus strait for document checks by Turkish maritime authorities. The Bosphorus Strait is an important shipping lane, as it is used to carry more than 3 percent of global supplies, including supplies from Russia and the Caspian Sea. As of Thursday (8/12), there were still about 16 oil tankers waiting to cross the Bosphorus strait into the Sea of Marmara, according to a report from the Istanbul-based Tribeca Shipping Agency. Turkey's maritime authority which controls the Bosphorus strait route on Thursday repeated a letter request from insurance companies for the majority of European Union (EU) tankers lining up to carry oil cargoes to EU ports.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research