Crude oil inches higher as EU considers ban on Russian oil imports

Crude oil prices rose on Thursday on concerns related to tight supplies as European Union considers a potential ban on Russian oil imports that is expected to further cripple futures supplies.  

The prices of both oil benchmarks tumbled substantially in the past few days as the International Monetary Fund (IMF) has recently lowered its growth forecast blaming rising inflation concerns and the ongoing conflict between Russia and Ukraine. The prices of both crude oil benchmarks dipped by more than 5% on Tuesday after IMF’s forecast.

In addition to this, a fresh rise in coronavirus in China has also dampened the demand.

At the flip side, the oil market was supported by a government report that shows U.S. crude stockpiles tumbled by 8 million barrels last week due to an increase in exports to a more than a two-year high, as per the Energy Information Administration data.

U.S. crude exports rose to more than 4Mbpd last week, partially phasing out the losses of Russian crude hit by sanctions from European nations and the United States.

Also Read: Crude oil surges to 14-year highs on delays in Iranian talks

On Thursday, Brent Crude oil settled at US108.33/bbl, up US$1.53/bbl and WTI crude oil settled at US$103.79/bbl, rising US$1.60/bbl.

Source: Refinitiv Eikon

On Friday, June delivery Brent Crude oil futures inched higher and last traded at US$107.53 per barrel down 0.96%, while June delivery WTI crude oil futures exchanged hands at US$103.11 per barrel, down 0.66% at 11:59 PM AEDT.

Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars

European Union’s ban on Russian oil imports

On Thursday, U.S. Treasury Secretary, Janet Yellen said that the EU needs to be careful about a complete ban on Russian energy imports because it would likely cause oil prices to spike.

Analysts across the globe believe that the market is weighing the possibility that additional supply and slowed growth could create a bullish case for oil.

The oil market remains tight with OPEC+ members struggling to meet their production targets and falling US crude stockpiles.

US crude stockpiles tumbled sharply in the last week due to a significant rise in exports. In the week ended 15 April, crude inventories tumbled to 413.7 million barrels. The overall exports rose to 4.3 million barrels per day, the highest since March 2020.

Also Read: Crude oil slides from multi-year highs as Iran talks rev up

Bottom Line

Crude oil prices rose on Thursday on mounting concerns related to future supply shortages as European Union considers a potential ban on Russian oil imports that is expected to further cripple the oil market. 

Here’s how commodities performed in the last week click here