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On October 19, WTI crude oil prices closed up by $3.29 (+5.62%) at a two-week high, while RBOB gasoline rose by $0.0636 (+3.52%). The surge in prices follows new sanctions imposed by the U.S. and EU on Russian energy firms, including major producers Rosneft and Lukoil, raising concerns over disruptions to Russian crude production and exports.
The sanctions could restrict business with these companies and cut access to the international financial system. Additionally, Ukrainian attacks have reduced Russia’s seaborne fuel shipments to 1.88 million barrels per day (bpd) in early October, marking the lowest average in over three years.
Meanwhile, the International Energy Agency (IEA) projects a record global oil surplus of 4.0 million bpd by 2026, which, along with increased crude production from Iraq and a lack of investment in U.S. oil rigs, poses a bearish outlook for future oil prices.
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