Oil rises to 7-week high on EU’s Russian oil ban effort, demand hopes


Oil prices rose to over $115 a barrel on Tuesday, their highest in about seven weeks, supported by the European Union’s ongoing push for a ban on Russian oil imports that would tighten supply.

The easing of China’s COVID-19 lockdowns also supported prices, as investors grew more optimistic about demand from the world’s second-largest economy.

Brent crude rose 91 cents to $115.15 a barrel by 11:11 am EDT (1511 GMT), and US West Texas Intermediate (WTI) crude was 77 cents higher at $114.97 a barrel.

During the session, Brent rose to a session high of $115.69, its highest since March 28, while WTI hit $115.56 per barrel, highest since March 24.

Prices have gained by around 20% since Russia’s invasion of Ukraine in late February, which has scrambled the global

market as governments and companies sanction Russian supplies.

EU foreign ministers failed on Monday in their effort to pressure Hungary to lift its veto on the proposed oil embargo. But some diplomats now point to a May 30-31 summit as the moment for agreement on a phased ban on Russian oil.

“Oil prices are continuing the trend of wrestling with where alternative supplies are going to come from,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

Further support came from figures showing OPEC and allied nations, which include Russia, in April produced far below levels required under a deal to gradually ease record output cuts made during the worst of the pandemic in 2020.


Meanwhile, non-Russian deliveries into the Polish port of Gdansk hit at least seven-year highs this month, as refiners in eastern Germany and Poland switch away from Russian supply.

“Ultimately, this is a supply-side story,” said Fawad Razaqzada, analyst at City Index. “Unless the OPEC and its allies ramp up production and fast, it is difficult to see how prices can go down meaningfully.”

US industry data on inventories are due later on Tuesday. Weekly inventory reports are expected to show a rise in crude stocks and declines in inventories of distillates and gasoline. [EIA/S]

In China, Shanghai achieved its long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones. However, most residents will have to put up with confinement for a while longer before resuming more normal life.


The commercial hub of 25 million set out on Monday its clearest timetable yet for exiting a lockdown now in its seventh week.

(Additional reporting by Alex Lawler in London, Isabel Kua in Singapore and Yuka Obayashi in TokyoEditing by Marguerita Choy and Louise Heavens)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard,

Digital Editor

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *