Hear the death rattle?
The Russian oil giant Yukos said on Sunday that it would immediately reduce some of its rail exports of crude oil to China. It appears to be the first time that Yukos's ability to transport oil has been affected by its tax dispute with the government, which has frozen most of its bank accounts.Recall that way back in late July the Washington Post played out Yukos' death scenario with the first step being the end of rail shipments of oil to China. After that comes an end to production in its Tomsk fields -- 25% of Yukos' overall production -- as on-site storage facilities fill up.
In response, NYMEX oil prices are back up over $46/barrel this morning. "Soft patch," my ass.