Oil rises as European Union seeks support to ban Russian oil
Oil rebounded on Wednesday, after falling nearly 10% from the previous two sessions as the European Union sought support to ban Russian oil and major producers warned of supply problems as demand surges.
Brent crude rose $2.35, or 2.41%, to $104.84 per barrel at 0658 GMT, while West Texas Intermediate (WTI) crude rose $2.2, or 2.24%, to $101.97 a barrel.
Brent and WTI rose more than $2 after falling 10% in two days.
Oil prices fell this week along with commodities and equities markets on the prospect of prolonged COVID restrictions in China to hit economic activity and concerns about sharp rate hikes in the US.
The vote, which should have been passed unanimously, was delayed as Hungary and some Eastern European countries voiced concerns that their economies could suffer. The impact of the embargo may be limited if the proposed sanctions are revised to ease concerns, but analysts say oil prices could still rise.
Even if some of the measures are relaxed, its sanctions are likely to significantly reduce imports of Russian oil and refined products.
Even the talks on tough oil ban against Russia were enough to boost prices. However, supply-side still faces challenges, OPEC+ warns producers of supply shortages.
Suhail al-Mazrouei, the energy minister of the United Arab Emirates, said on Tuesday, highlighting supply concerns, warning that the Organization of Petroleum Exporting Countries and its allies will not be able to meet demand as fuel demand recovers in the wake of the coronavirus pandemic.
Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said that attention should be paid not only to the limited supply of crude oil but also to the broader dwindling global energy capacity.
Limiting market gains, the dollar held near two-year highs ahead of the inflation reading at 1230 GMT, which could signal the outlook for Fed policy and make crude more expensive for buyers of other currencies.
Factory-gate inflation in China fell to a one-year low in April as government-managed manufacturing efforts bolstered supply and COVID-19 lockdowns in key industries cooled demand.
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