Oil up over supply uncertainties on prospects of EU’s Russian oil ban
With the EU still wrangling with Hungary over the ban on Russian oil, the market jitters over tight supply fears.
(AP)
Oil prices continue to rise, extending a
cautious rally this week on signs of tight supply while the
European Union (EU) wrangles with Hungary over plans to ban
imports from Russia, the world’s second-largest crude exporter, following the conflict in Ukraine.
Brent crude futures for July settlement gained 40
cents, or 0.35 percent, to $114.43 a barrel.
US West Texas Intermediate (WTI) crude futures for
July delivery climbed 55 cents, or 0.5 percent, to $110.88 a barrel.
A bigger-than-expected drawdown in US crude inventories in
the week to May 20, following soaring exports, buoyed the market
on Wednesday.
Analysts said the inventory draw and the prospect
of an EU embargo on Russian oil, in retaliation for what Moscow
calls its “special military operation” in Ukraine, were pushing
prices higher.
READ MORE: US oil, gas firms use Ukraine conflict to resist climate efforts: report
“The focus in oil markets is on the EU summit taking place
next week, at which another attempt will be made to agree on an
EU-wide embargo on Russian oil,” said Stephen Innes, managing
partner at SPI Asset Management in a note.
European Council President Charles Michel on Wednesday said
he is confident that an agreement can be reached before the
council’s next meeting on May 30.
However, Hungary remains a stumbling block to the unanimous
support needed for EU sanctions. Hungary is pressing for about
$800 million to upgrade its refineries and
expand a pipeline from Croatia to enable it to switch away from
Russian oil.
READ MORE: Saudi Aramco’s profit soars as oil prices surge
Even without a formal ban, much less Russian oil is
available to the market as buyers and trading houses avoid
dealing with crude and fuel suppliers from the country.
ANZ analysts pointed to cargoes from Baltic ports taking
longer journeys to Asian refineries, while deliveries to the
Netherlands and France have all but halted.
A forecast increase in oil output to a record high of 5.2
million barrels per day (bpd) in the Permian Basin of the United
States is unlikely to plug the two million to two million bpd gap
from lost Russian supply, said Commonwealth Bank commodities
analyst Vivek Dhar.
Still, this week’s rise in oil markets has been tempered by
strict Covid-19 lockdowns increasing concerns about falling fuel
demand in China, the world’s biggest oil importer, and worries
about inflation leading to slower global growth.
Source: TRTWorld and agencies
With the EU still wrangling with Hungary over the ban on Russian oil, the market jitters over tight supply fears.
(AP)
Oil prices continue to rise, extending a
cautious rally this week on signs of tight supply while the
European Union (EU) wrangles with Hungary over plans to ban
imports from Russia, the world’s second-largest crude exporter, following the conflict in Ukraine.
Brent crude futures for July settlement gained 40
cents, or 0.35 percent, to $114.43 a barrel.
US West Texas Intermediate (WTI) crude futures for
July delivery climbed 55 cents, or 0.5 percent, to $110.88 a barrel.
A bigger-than-expected drawdown in US crude inventories in
the week to May 20, following soaring exports, buoyed the market
on Wednesday.
Analysts said the inventory draw and the prospect
of an EU embargo on Russian oil, in retaliation for what Moscow
calls its “special military operation” in Ukraine, were pushing
prices higher.
READ MORE: US oil, gas firms use Ukraine conflict to resist climate efforts: report
“The focus in oil markets is on the EU summit taking place
next week, at which another attempt will be made to agree on an
EU-wide embargo on Russian oil,” said Stephen Innes, managing
partner at SPI Asset Management in a note.
European Council President Charles Michel on Wednesday said
he is confident that an agreement can be reached before the
council’s next meeting on May 30.
However, Hungary remains a stumbling block to the unanimous
support needed for EU sanctions. Hungary is pressing for about
$800 million to upgrade its refineries and
expand a pipeline from Croatia to enable it to switch away from
Russian oil.
READ MORE: Saudi Aramco’s profit soars as oil prices surge
Even without a formal ban, much less Russian oil is
available to the market as buyers and trading houses avoid
dealing with crude and fuel suppliers from the country.
ANZ analysts pointed to cargoes from Baltic ports taking
longer journeys to Asian refineries, while deliveries to the
Netherlands and France have all but halted.
A forecast increase in oil output to a record high of 5.2
million barrels per day (bpd) in the Permian Basin of the United
States is unlikely to plug the two million to two million bpd gap
from lost Russian supply, said Commonwealth Bank commodities
analyst Vivek Dhar.
Still, this week’s rise in oil markets has been tempered by
strict Covid-19 lockdowns increasing concerns about falling fuel
demand in China, the world’s biggest oil importer, and worries
about inflation leading to slower global growth.
Source: TRTWorld and agencies
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