Oil firms on EU’s Russian oil ban and end of Shanghai lockdown

Pump jacks function at sundown in an oil discipline in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

LONDON, June 1 (Reuters) – Oil costs firmed on Wednesday after European Union leaders agreed to a partial and phased ban on Russian oil and as China ended its COVID-19 lockdown in Shanghai.

Brent crude was up $1.71, or 1.5%, at $117.31 a barrel by 0817 GMT. U.S. West Texas Intermediate (WTI) crude rose $1.67, or 1.5%, to $116.34.

Each benchmarks registered features over Might, marking the sixth straight month of rising costs.

“The temper on the oil market is seemingly turning ever extra bullish,” mentioned Julius Baer analyst Norbert Rucker. “Europe’s embargo and China’s partial reopening is fuelling provide fears and lifting oil costs.”

EU leaders agreed in precept on Monday to chop 90% of oil imports from Russia by the tip of this 12 months, the bloc’s hardest sanctions but for the reason that begin of the invasion of Ukraine, which Moscow calls a “particular navy operation”. learn extra

As soon as totally adopted, sanctions on crude shall 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 and two different landlocked Central European states.

In China, Shanghai’s strict COVID-19 lockdown ended on Wednesday after two months, prompting expectations of firmer gas demand from the nation. learn extra

Capping features have been experiences that some producers have been exploring the concept of suspending Russia’s participation in a an OPEC+ manufacturing deal on expectations such a transfer would enhance provide.

OPEC+ contains members of the Group of the Petroleum Exporting International locations and their allies.

“The total reopening of Shanghai from COVID-19 restrictions could increase sentiment on the periphery, however the doable exemption of Russia by OPEC, from the output settlement, is the larger story,” mentioned Jeffrey Halley, senior market analyst at OANDA.

Whereas there was no formal push for OPEC international locations to pump extra oil to offset any potential Russian shortfall, some Gulf members had begun planning an output enhance someday within the subsequent few months, the Wall Road Journal reported, citing OPEC delegates. learn extra

U.S. crude oil manufacturing rose in March by greater than 3% to its highest since November, a U.S. Vitality Info Administration report confirmed on Tuesday. learn extra

Analysts polled by Reuters anticipated U.S. crude oil inventories to have fallen final week whereas gasoline and distillate stockpiles have been anticipated to have elevated. Official authorities information is anticipated on Thursday.

Reporting by Ahmad Ghaddar
Extra reporting by Isabel Kua in Singapore
Enhancing by David Goodman

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