New Delhi : Crude oil prices rose nearly 5% on Wednesday on supply concerns caused by the European Union’s proposal to impose sanctions on energy imports from Russia.
The European Union is attempting to come to an agreement this week to ban Russian oil imports, despite opposition from Hungary’s proposed embargo.
At the time of writing this story, the July contract for Brent futures on the Intercontinental Exchange was trading at $107.24 a barrel, up 4.67% from the previous close. West Texas Intermediate’s June contract rose 5.51% to $105.26 a barrel.
The jump in prices comes after a fall of nearly 9% in the last two trading sessions in line with the fall in other commodities and equity markets.
“EU’s proposed phased embargo on Russian oil helped increase crude oil prices. However, passing the resolution requires a unanimous vote by EU members this week,” said Base Metals of Angel One Ltd. Research associate of Sandeep Sawant Desai said.
Desai noted that the fall in prices in the past two sessions came after the European Union suspended its action on a proposed Russian oil embargo, after Hungary objected to the decision and some other countries worried about the impact on their economies. expressed. Besides, rising Covid-19 cases and prolonged lockdown in China also raised concerns about declining demand in the major oil importing country.
A report by Kotak Securities said that prices rose on Wednesday as the market’s focus shifted to the weekly inventory report. “The US EIA weekly report expects a marginal decline in US crude by 0.457 million barrels and a marginal decline in gasoline and distillate stocks,” the report said. The report said a correction in the stock markets also supported oil prices.
Rise in crude oil prices affects Indian as it imports around 85% of its energy requirements. The Indian basket of crude, including Oman, Dubai and Brent crudes, was last recorded at $103.29 per barrel on May 10.