Oil prices rose on Wednesday following European Union leaders agreed to a phased ban on Russian oil, with China ending its coronavirus lockdown in Shanghai, which might boost demand in the oil market.
Oil standards have risen steadily for several weeks as Russian shipments shrink due to EU and US sanctions, and since India and China can only buy so much from Russia, the world’s largest exporter of crude oil and fuel.
Brent crude settled at $116.29 a barrel, up 0.6%, while US West Texas Intermediate crude rose 0.5%, to $115.26.
European Union leaders agreed in principle on Monday to cut 90% of oil imports from Russia by the end of this year, the bloc’s toughest sanctions yet since the start of its war with Ukraine, which Moscow describes as a “special military operation”.
In China, the strict coronavirus lockdown in Shanghai ended on Wednesday following two months, leading to expectations of increased demand for fuel.
Two OPEC+ sources said on Wednesday that members had not discussed the idea of Russia suspending an existing oil supply deal, following the Wall Street Journal reported on Tuesday that such a move is under consideration.
OPEC+ includes members of the Organization of the Petroleum Exporting Countries and their allies led by Russia, and the group is set to meet on Thursday to set policy.
The group has been criticized for not increasing production more quickly to deal with rising fuel prices, but Gulf countries have said most members of the organization do not have the extra capacity to increase production.
On Wednesday, the OPEC + technical committee cut its forecast for the oil market surplus in 2022 by regarding 500,000 barrels per day to 1.4 million barrels per day, sources said.
The US Energy Information Administration said on Tuesday that US crude oil production rose in March by more than 3% to 11.65 million barrels per day, the highest level since November.