Oil rises in price for the third day in a row in anticipation of the EU embargo
Oil prices rose for the third consecutive session on Friday, May 6, ignoring concerns about global economic growth. Concerns about supply cuts supported prices ahead of a looming European Union embargo on Russian oil.
It is reported by RBC-Ukraine with reference to Reuters.
Brent futures rose 0.8% to $111.74 a barrel, while West Texas Intermediate (WTI) rose 0.7% to $109.06 a barrel.
Brent and WTI rise for the second week in a row thanks to the EU proposal to phase out the supply of Russian crude oil in six months and oil products by the end of 2022. It will also result in a ban on all shipping and insurance services for the transportation of Russian oil. The plan still requires unanimous support from the 27 countries of the bloc.
“There are concerns about global growth and what it could mean for oil demand. However, the looming EU ban on Russian oil more than makes up for this for now and should therefore limit the price slide,” said Warren Patterson, head of ING’s commodities research.
On the supply side, OPEC+ agreed, as expected, to another modest monthly increase in oil production. Ignoring calls from Western countries to increase production, OPEC+ decided to increase production by 432,000 bpd in June, in line with its plan to ease restrictions imposed after the pandemic hit demand.
A U.S. Senate panel has put forward a bill that could expose OPEC+ to legal action for conspiring to raise oil prices. Congress failed to pass legislation for more than two decades, but lawmakers are concerned about rising inflation and high gas prices
Recall that the sixth package of EU sanctions will include the disconnection of the Russian Sberbank from SWIFT. The head of the European Commission, Ursula von der Leyen, said that the phase-out of Russian oil would be phased out.
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