Oil extends bull run as EU agrees to ban most Russian oil

FILE PHOTO – Fashions of oil barrels and a pump jack are displayed in entrance of a rising inventory graph and “$100” on this illustration taken February 24, 2022. REUTERS/Dado Ruvic/Illustration


HOUSTON, Could 31 (Reuters) – Oil costs prolonged a bull run on Tuesday after the European Union agreed to a partial and phased ban on Russian oil and China determined to elevate some COVID-19 restrictions and the U.S. summer season driving season kicked off.

Brent crude for July, which expires on Tuesday, rose $2.13, or 1.8%, to $123.80 a barrel by 11:05 a.m. ET (1505 GMT), after earlier rising to $124.64 – its highest since March 9. The extra lively August contract hit a excessive of $120.80.

The premium of August-loading Brent contracts over a six-month unfold hit a nine-week excessive at near $15 a barrel, indicating present provide tightness.

U.S. West Texas Intermediate (WTI) crude was buying and selling at $117.99 a barrel, up $2.92 in a fourth consecutive session of good points, up 3.6% from Friday’s shut, and touched its highest since March 9. There was no settlement on Monday’s U.S. Memorial Day vacation.

Each benchmarkswere set to finish Could larger for a sixth straight month.

“Oil costs proceed their largest run in over a decade as we do not have sufficient of something and we’re going to have much less,” stated Phil Flynn, an analyst at Value Futures group.

“We’re wanting refining capability and now Europe might be brief crude as they transfer ahead on a Russian oil ban” he added.

EU leaders agreed in precept to chop 90% of oil imports from Russia, the bloc’s hardest sanction but on Moscow for the reason that invasion of Ukraine three months in the past. learn extra

As soon as totally adopted, sanctions on crude might be phased in over six months and on refined merchandise over eight months. The embargo exempts pipeline oil from Russia as a concession to Hungary.

OPEC+, which teams the cartel and ally producers, is ready to stay to a modest July output hike of 432,000 barrels per day, OPEC+ sources stated. learn extra

Oil costs discovered additional help as Shanghai introduced an finish to its COVID-19 lockdown, and can enable individuals in China’s largest metropolis to depart their houses and drive their vehicles from Wednesday. learn extra

Nonetheless, worth good points have been restricted by inflation fears after hawkish feedback from a Federal Reserve official that spooked inventory market traders.

U.S. retail gasoline costs additionally touched a document nationwide common of $4.622 a gallon, based on AAA gasoline costs knowledge as Memorial Day weekend marked the official begin of the summer season driving season.

Extra reporting by Shadia Nasralla in London and Jeslyn Lerh; Enhancing by Marguerita Choy and Edmund Blair

: .