Oil jumps $ 5 ahead of the “OPEC +” meeting and amid anticipation of the embargo on Russia

Oil prices jumped on Wednesday following the European Union, the world’s largest trading bloc, announced plans to phase out its imports of Russian crude, raising concerns regarding further tightening of supplies to the market.
Both benchmarks have posted steady gains over the past two months in the wake of Russia’s invasion of Ukraine. So far, the EU has been reluctant to completely cut off its imports of Russian oil and gas and its plans do not indicate a complete ban on all EU member states.
Europe imports regarding 3.5 million barrels per day of Russian oil and its derivatives and also depends on gas supplies from Russia.
“Stocks are very tight, so once morest this background, when you talk regarding this ban there are a lot of questions regarding how Europe will compensate for this,” said Phil Flynn, chief analyst at Price Futures Group. Brent crude contracts ended the trading session up $5.17, or 4.9 percent, to settle at $110.14 a barrel.
US West Texas Intermediate crude contracts closed $5.40, or 5.3 percent, at $107.81 a barrel.
It is unlikely that OPEC members and allied producers at their meeting on Thursday will meet the need for a significant increase in supplies. The OPEC + alliance is expected to stick to its plan to gradually raise monthly production.
In the United States, crude stocks recorded a modest increase last week, according to data from the US Energy Information Administration. Inventories rose by 1.3 million barrels as the United States released more barrels from strategic reserves.
Fuel stocks have fallen, partly due to an increase in oil product exports since the Russian invasion, as buyers search for other sources.
The oil market showed little reaction to the US Federal Reserve’s announcement of an increase in interest rates by half a percentage point in its efforts to curb rising inflation.
“The market was very strong prior to this announcement and I think the Fed’s decision was a known outcome,” said Gary Cunningham, director of market research at Tradition Energy. (Archyde.com)