Oil headed for the longest streak of monthly gains in more than a decade as European Union leaders agreed to pursue a partial ban on imports from Russia and China further eased anti-virus restrictions to support demand .
Crude oil rents topped $124 a barrel, hitting the highest level since early March. The latest round of EU sanctions would ban the purchase of oil from Russia delivered by sea but includes a temporary exemption for pipelines, European Council President Charles Michel said.
The package, designed to punish Moscow for invading Ukraine, also proposes a ban on insurance related to shipping oil to third countries.
Crude oil has soared this year as conflict in Europe squeezed global supplies at a time of rising demand, depleting inventories and pushing product prices to all-time highs. Brent and the US benchmark West Texas Intermediate are on track to complete the sixth monthly rise in May.
Oil prices were also lifted as US motorists ushered in the country’s busy summer driving season, while authorities in China eased anti-virus curbs that had hurt energy use.
The EU’s move provides an exception for Hungary, which would continue to receive Russian pipeline oil. It follows US and UK bans on Russian exports, although buyers in Asia – notably China and India – have stepped in to take on more of the shunned cargo.
“If implemented as mentioned above, Russian oil will still flow to Europe in the coming months, but in essence the ban will likely still push up longer-term prices,” said Giovanni Staunovo, commodities analyst at UBS Group AG.
“The stronger factor to watch is the reopening of China and summer travel plans in the western world.”
The rise in oil has helped boost inflation.
https://www.independent.ie/business/world/oil-spikes-as-china-eases-covid-restrictions-41708152.html Oil spikes as China eases Covid restrictions