Oil prices soared on Wednesday after EU leaders agreed to a phase-out ban on Russian oil, with China ending a corona virus lockout in Shanghai, which could boost demand in the oil market.
Oil standards have been steadily rising for several weeks as Russian exports shrink due to EU and US sanctions, and only India and China can afford to buy more from Russia, the world’s largest crude oil and fuel exporter.
Brent crude was up 0.6% at $ 116.29 a barrel, while US West Texas Intermediate was up 0.5% at $ 115.26.
EU leaders on Monday agreed in principle to cut 90 percent of oil imports from Russia by the end of this year, with more severe sanctions since the start of its war with Ukraine, which Moscow describes as a “special military operation.”
In China, the severe corona virus lockout in Shanghai ended on Wednesday after two months, leading to expectations of increased demand for fuel.
Two OPEC + sources said on Wednesday that members did not discuss the idea of Russia suspending an existing oil supply deal after the Wall Street Journal reported on Tuesday that such a move was under consideration.
The OPEC + includes members of the Organization of the Petroleum Exporting Countries and their allies, led by Russia, and the group is due to meet on Thursday to formulate policy.
The group was criticized for not increasing production quickly to cope with rising fuel prices, but said most members of the Gulf states did not have the extra capacity to increase production.
On Wednesday, the OPEC + Technology Group cut its forecast for the oil market surplus by 2022 to about 1.4 million barrels a day from about 500,000 barrels a day, sources said.
U.S. Energy Information Administration on Tuesday said U.S. crude oil production rose more than 3% in March to 11.65 million barrels per day, the highest level since November.
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