Oil prices rose ahead of a spate of high-level diplomatic activity over months of war in Ukraine that may result in new restrictions on Russia.
est Texas Intermediate topped $110 a barrel after giving up early gains to end slightly lower on Tuesday.
European Union and NATO leaders will meet in Brussels on Thursday to step up their response to the crisis.
Ahead of the meetings, Jake Sullivan, White House national security adviser, said the US and its allies will impose more sanctions on Moscow.
As the conflict drags on, more and more users are avoiding Russian crude.
In Europe, TotalEnergies SE announced it would stop buying the country’s oil and diesel by the end of the year, while Japanese refiner Eneos Holdings Inc. will halt new purchases.
Oil has been boosted by Russia’s invasion, retaliation and the fact that much of the industry is effectively self-sanctioning.
The possibility of the EU restricting Russian crude was raised, although members, including Germany, oppose it. Sullivan said Biden will announce joint action on energy security and measures to reduce Europe’s dependence on Russian natural gas.
“The market is definitely watching the discussions in Europe closely,” said Daniel Hynes, Senior Commodities Strategist at Australia & New Zealand Banking Group Ltd Oil.”
As many buyers shun Russian crude, the country’s flagship Ural grade has slipped while some April overland shipments have been cancelled. That reinforces signs of increased pressure on the country’s oil market.
Nevertheless, some Russian streams still find buyers. India’s refiners grabbed multiple shipments of Ural crude this month, while China’s private processors are believed to be targeting preferred grades from eastern Russia.
Crude oil markets remain strongly bearish, a bullish pattern characterized by short-term prices outperforming longer-term ones. Brent’s prompt spread — the difference between the two closest contracts — was $3.74 a barrel, up from $2.38 a week ago and 41 cents to start the year.
In the physical market, too, storm damage could force a key Kazakh-Russia oil pipeline to cut shipments through a key Black Sea terminal by as much as 1 million barrels a day for several weeks.
In the US, the industry-funded American Petroleum Institute said crude inventories fell by 4.3 million barrels last week, according to people familiar with the data.
Traders are also watching an Omicron wave spreading across China, with lockdowns being imposed in some areas. The country recorded 4,594 new daily infections earlier this week, the most significant increase since the first outbreak.
“Lockdowns in China are creating a lot of uncertainty in terms of demand,” Hynes said.
https://www.independent.ie/business/world/oil-gains-as-nato-eu-summits-raise-spectre-of-new-russian-curbs-41477805.html Oil gains as Nato, EU summits raise specter of new Russian curbs