The European Union has suspended talks on approving a price cap on Russian oil until at least Monday, with some of the bloc’s eastern-most members objecting to a proposal they consider too generous to Russia, although diplomats said Friday they still believe a deal will be struck in the coming days.
The European Commission and the G-7 have been looking at a price cap in the $60-$70/bbl range, which has drawn the ire of Poland, Estonia, Latvia and Lithuania because the proposed cap is above the rates Russia currently sells crude.
Shipping nations like Greece favor a higher price cap that will help keep trade flowing.
EU sanctions on Russian oil set to start December 5, and the disruption to the market could be greater if the price cap is not in place.
Meanwhile, Russia reportedly is drafting a presidential decree that would ban its companies and any traders buying the country’s crude from selling it to anyone that participates in a price cap.
For the week, front-month Nymex crude for January delivery (CL1:COM) closed -4.8% at $76.28/bbl, and January Brent crude (CO1:COM) ended -4.5% at $83.63/bbl, the third straight weekly decline for both benchmarks, with investors also weighing prospects for Chinese demand as the country’s daily count of COVID-19 infections topped 30K for the first time ever.
Among the S&P’s 11 stock market sectors, energy (NYSEARCA:XLE) brought up the rear for the week, edging 0.2% higher.