Oil prices rose by more than 1.5%, during trading on Thursday, with the emergence of supply concerns due to a possible European Union embargo on Russian oil, days after the decline in supplies from Libya rocked the market.
This comes amid tight supply fundamentals, with sentiment receiving additional support with a significant drawdown in US oil inventories and refined products last week.
Oil Prices Today
Brent crude futures prices – for June delivery – rose 1.55%, to reach 108.29 dollars per barrel.
While the prices of West Texas Intermediate crude futures – June delivery – rose by 1.60%, to $103.52 a barrel.
Oil prices witnessed a volatile trading session, yesterday, Wednesday; US crude ended higher above $102 a barrel, while Brent crude fell below $107.
Russian Oil Embargo
Analysts said market volatility is likely to rebound soon; The European Union is still considering a Russian oil embargo for its invasion of Ukraine, which Moscow describes as a “special military operation”.
“EU discussions to ban or phase out Russian oil purchases have had the biggest impact on crude oil prices in recent days,” said Vandana Hari, founder of oil market analysis firm Vanda Insights.
And Libya, a member of the Organization of the Petroleum Exporting Countries, said on Wednesday that the country was losing more than 550,000 barrels per day of oil production due to shutdowns in major fields and export terminals.
Demand In China
China’s demand outlook continues to weigh on the market; As the world’s largest importer of oil – slowly – is easing the strict restrictions of Corona that have affected manufacturing activity and global supply chains.
The International Monetary Fund highlighted the risks in China when it cut its global economic growth forecast by a full percentage point on Tuesday.
Meanwhile, Kazakhstan’s Energy Minister Bulat Akchulakov said on Wednesday that the Black Sea terminal of the Caspian Sea Pipeline Consortium may return to full capacity this week.
“The resumption of crude oil deliveries from CBC will be offset to some extent by continued outages in Libya and the possibility of more Russian crude leaving the market in the face of the EU ban,” Harry said.
OPEC Production
The oil market remains tight; The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, are struggling to meet their production targets with US oil inventories falling sharply in the week ending April 15.
“I still expect Brent crude to remain in a choppy $100-$120 per barrel range, with WTI trading in the $95-$115 range,” said analyst Jeffrey Haley.
He added, “We may see a possible European oil embargo on Russia, next week, after the French elections, which indicates that oil is a candidate to move towards the top.”
US Oil Stocks
The weekly report of the US Energy Information Administration showed that oil stocks in the United States decreased by 8 million barrels during the past week, bringing the total to 413.7 million barrels.
Standard & Poor’s Global had estimated that US oil inventories had risen by 2.2 million barrels.
Gasoline and distillate stocks in the United States also fell by 0.8 and 2.7 million barrels, respectively.
Source: XglobalMarkets
