Putin threatens to cut oil production to hit back against West

Oil prices rose by more than one percent on Monday, with Brent crude futures up 46 cents (38 pence) or 0.6 percent to $76.56 (£62.61) per barrel by 5am GMT. US West Texas Intermediate crude increased by 0.8 percent, or 57 cents (47 pence), to $71.59 (£58.55) per barrel.

This gain in price comes after declines in both grades last week to their lowest since December 2021, fuelling concerns that a possible global recession will impact oil demand.

Edward Moya, a senior market analyst for OANDA, said: “Oil prices are higher as the Keystone pipeline remains shut, China’s COVID controls ease and on concerns that Russia could reduce output.”

The Keystone pipeline has been closed since last week due to a leak, with Canada’s TC Energy saying on Sunday the cause of the incident had not yet been determined.

They also did not give a date for the pipeline to be reopened.

The Keystone line ships 622,000 barrels of Canadian crude per day from Alberta to refiners in the US Midwest and the Gulf Coast.

China, the world’s largest crude oil importer, offered some hope to markets as it continues to loosen its strict COVID-19 restrictions.

However, the streets of Beijing remain quiet and many businesses were closed over the weekend, with a return to normal reportedly a “long way off”, according to residents.

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However, continued sanctions from the European Union imposed on Russia have kept volatility high on prices.

On Sunday Saudi Arabia’s energy minister added their voice to the discussion, agreeing that European price cap measures had still had no clear effect.

In the US, Treasury Secretary Janet Yellen forecast a substantial reduction in US inflation in 2023, barring an unexpected shock.