OIL FUTURES:Prices settle lower as some Rosneft refineries avoid US sanctions

Crude futures settled lower Oct.28 on news that Rosneft-owned refineries in Europe could avoid US sanctions,and as the market remained well-supplied.

NYMEX front-month crude settled at $60.15/b,down $1.16.ICE front-month Brent settled at $64.40/b, down $1.22.

Germany's Rosneft-owned refineries will remain free to transact as normal after new US sanctions are enforced on Nov.21,a German government spokesperson said Oct.28.Rosneft Deutschland retains a majority 54.17% stake in the Schwedt refinery in northeast Germany, along with a 29% stake in MiRo and 24% in Bayernoil, which it jointly owns with Eni, Shell and ExxonMobil.

Russia's Lukoil said Oct.27 that due to sanctions,it plans to sell its international assets and is already considering bids from potential purchasers. Those assets include an interest in three European refineries with a combined capacity of close to 400,000 b/d.

The Rosneft news eased "fears about a tight diesel market," said PRICE Futures Group analyst Phil Flynn in a report.

Diesel led the complex lower Oct.28,with NYMEX front-month ULSD settling down 4.89 cents at $2.3872/gal, while front-month RBOB settled at $1.9252/gal, up 48 points.

However, diesel remains well-supported.The NYMEX front-month ULSD crack against WTI settled at $39.11/b,down 80 cents,while the RBOB crack settled at $18.11/b.

The US Department of the Treasury imposed sanctions on Rosneft and Lukoilon Oct.22, in a bid to increase pressure on Russia's energy sector and degrade the Kremlin's ability to raise revenue to finance its invasion of Ukraine.

Indian refiners are likely to hold off on new Russian crude import deals due to US sanctions on Rosneft and Lukoil, refining sources and oil industry officials said. However, flows are unlikely to come to an abrupt halt as sourcing alternative feedstock for existing volumes poses a significant challenge.

India and South Korea have been increasing their imports of US crude.

South Korea imported 11.682 million barrels of mostly light sweet WTI Midland and West Texas Light crudes from the US in September, up 9.9% from a year earlier, according to Korea National Oil Corp.data.

US President Donald Trump and Japanese Prime Minister Sanae Takaichi signed a comprehensive trade and investment agreement Oct. 28 in Tokyo to implement previous commitments,including Japan's pledged $550 billion investment in US sectors such as energy infrastructure, LNG, advanced fuels,grid modernization, critical minerals mining, processing and refining.

All eyes are on the Oct.30 meeting between Chinese President Xi Jinping and Trump in South Korea on the sidelines of the APEC summit. It will mark the first face-to-face meeting between the two leaders in six years.Tariffs remain capped at 30% on Chinese imports and 10% on US goods under a 90-day truce that is set to expire on Nov. 10.