Workers walk while oil pumps are seen in the background at the Uzen oil and gas field in the Mangistau region of Kazakhstan, November 13, 2021. REUTERS / Pavel Mikheev
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- The EU is changing the plan for Russian sanctions to win over reluctant states
- The United States plans to buy back 60 million barrels of emergency supplies
- The US Senate Commission has passed an antitrust bill that puts pressure on OPEC +
- The figures are rising for the second week in a row
Houston, May 6 (Reuters) – Oil prices rose nearly 1.5 percent on Friday, marking the second straight increase in a week as upcoming EU sanctions against Russian oil boosted the prospect of tougher supplies and prompted traders to give up worries about global economic growth.
Brent futures rose $ 1.49, or 1.3 percent, to $ 112.39 a barrel. US crude oil West Texas Intermediate (WTI) rose $ 1.51 or 1.4% to end at $ 109.77 a barrel.
“In the short term, fundamentals for oil are on the rise, and only fears of an economic slowdown are holding us back,” said Phil Flynn, an analyst at Price Futures Group.
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For the week, WTI rose by about 5%, while Brent by nearly 4% after the EU imposed an embargo on Russian oil as part of its toughest package of sanctions over the conflict in Ukraine.
The EU is changing its sanctions plan, hoping to win over reluctant states and secure the necessary unanimous support from the 27 member states, three EU sources told Reuters. The initial proposal called for an end to imports of Russian crude and petroleum products from the EU by the end of this year. Read more
“The growing EU embargo on Russian oil is leading to a sharp contraction in supplies. In any case, OPEC + is not in the mood to help, even when rising energy prices are causing harmful levels of inflation, “said PVM analyst Stephen Brennock.
Ignoring calls from Western countries to increase production, the Organization of the Petroleum Exporting Countries, Russia and Allied Producers (OPEC +) remained committed to raising its production target by 432,000 barrels a day in June. Read more
However, analysts expect the actual growth of the group’s production to be much less due to capacity constraints. Read more
“There is a zero chance that some members will fill this quota, as production challenges affect Nigeria and other African members,” said Jeffrey Halley, senior market analyst in the Asia-Pacific region at OANDA.
On Thursday, a committee in the US Senate proposed a bill that could expose OPEC + to lawsuits for a secret agreement to raise oil prices. Read more
On the supply side, the number of oil rigs in the US, an early indicator of future production, rose by five to 557 this week, the highest level since April 2020. []RIG / U]
Money managers cut their net long positions in futures and US crude oil options during the week to May 3, the US Commodity Futures Trading Commission (CFTC) said.
Investors are expecting higher demand from the United States this fall as Washington unveiled plans to buy 60 million barrels of crude oil to replenish emergency supplies. read more However, signs of a weakening global economy are fueling fears of demand, limiting the rise in oil prices.
On Thursday, the Bank of England warned that Britain risks a double blow from recession and inflation above 10%. It raised interest rates by a quarter of a percentage point to 1%, the highest since 2009 read more
China’s strict restrictions on COVID-19 create obstacles to the world’s second-largest economy and leading oil importer. Read more
Authorities in Beijing have said all non-essential services will be shut down in its largest neighborhood, Chaoyang, where embassies and large offices are located. Read more
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Additional reports from Rowena Edwards in London, Florence Tan in Singapore and Laura Sanicola in New York Edited by Marguerite Choi and David Gregorio
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