Brent crude futures edged higher by $1.53 at $108.33 a barrel, after hitting a high of $109.80 earlier. US West Texas Intermediate (WTI) crude futures ended $1.60, or 1.6%, at $103.79, having previously hit a high of $105.42.
see photosBrent is up nearly 8% in the last seven trading days
Oil prices rose on Thursday, as the European Union (EU) further restricted oil trade around the world over concerns about imposing possible sanctions on Russian oil imports. Brent crude futures edged higher by $1.53 at $108.33 a barrel, after hitting a high of $109.80 earlier. US West Texas Intermediate (WTI) crude futures ended $1.60, or 1.6%, at $103.79, having previously hit a high of $105.42. Buyers also reacted to ongoing blockades in Libya, which is losing more than 550,000 barrels of oil production per day due to disruptions at key areas and export terminals.
Brent has gained nearly 8% over the past seven trading days, but the rally has come at a slow, grinding pace, in contrast to that frenzy in late February when Russia invaded Ukraine and even in mid-March.
“It’s not as smooth trading as it was a few weeks ago,” said Phil Flynn, senior analyst at Price Futures Group. “You have to take on more risk, and that could be by design with more trading with these hedge funds and algo funds.”
US Treasury Secretary Janet Yellen said on Thursday that the European Union needs to be careful about a complete ban on Russian energy imports, as it is likely to propel oil prices, followed by a sell-off in the market.
US crude exports rose by more than 4 million barrels in a day last week, partially offsetting losses in Russian crude oil hit by sanctions from the United States and European countries.
The European Union is still weighing such sanctions on Russia’s invasion of Ukraine, which Moscow calls a “special military operation” to oust its neighbor.
Flynn said the market is weighing the possibility that down the road, slower growth or excess supply could weaken the bullish case for oil. In the meantime, however, the market remains strong. The US Department of Energy said on Wednesday that US stocks of distillate fuel are near a 14-year low.
Traders also cited comments from Federal Reserve officials who suggested an aggressive path to raise US interest rates in the coming months. This could drag down growth while reducing demand for energy products.
US crude exports rose by more than 4 million barrels in a day last week, partially offsetting losses in Russian crude oil hit by sanctions from the United States and European countries.
Oil markets remain tight with the Organization of the Petroleum Exporting Countries and Russia-led allies, called OPEC+, struggling to meet their production targets and US crude for the week ending April 15. There has been a sharp decline in reserves. [EIA/S]
“With only two countries in the OPEC+ alliance with significant excess capacity, Saudi Arabia and the United Arab Emirates, the group is taking a cautious approach to pandemic-related output cuts,” UBS said in a note.
The demand outlook in China continues to weigh on the market, as the world’s biggest oil importer gradually eases strict COVID-19 restrictions that have hit manufacturing activity and global supply chains.
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