Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Crude Oil Higher on Supply Concerns; EU Lines Up Russia Ban

Commodities May 06, 2022 09:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse   

Investing.com -- Oil prices traded higher Friday, on course for a second straight positive week, on the prospect of tighter global supply as the European Union lines up an embargo of Russian crude.

By 9:15 AM ET (1315 GMT), U.S. crude futures traded 0.8% higher at $109.08 a barrel, while the Brent contract rose 1% to $112.03 a barrel. 

U.S. Gasoline RBOB Futures were up 0.8% at $3.6896 a gallon.

The EU proposal suggests an embargo on imported crude from Russia in six months as well as a phasing out of imports of refined products by the end of 2022.

Such a deal would require unanimous approval from all 27 countries, and that is unlikely with a handful of EU members against an embargo. 

That said, Bloomberg reported the European Union is willing to offer compromises to some central European member states in order to get unanimity, allowing Hungary and Slovakia to continue importing Russian crude and refined products until the end of 2024, while Czechia would be allowed to do the same until June 2024. 

These landlocked eastern European states are more dependent than the rest of the EU bloc on Russian oil due to the network of pipelines established during the Cold War.

The Organisation of the Petroleum Exporting Countries and allies such as Russia, a group known as OPEC+, did little to alleviate fears that global supply would be affected by the EU move, announcing another modest monthly increase of 432,000 barrels per day in its production target for June.

Even this increase is unlikely to be fully implemented, with countries like Nigeria and Angola struggling to increase output in the wake of investment cuts after oil prices collapsed in 2015-2016.

“The group is struggling to hit output quotas due to disruptions and a lack of investment in fields,” said analysts at ING, in a note. “Lagging production is unlikely to change anytime soon, particularly given the weaker demand for Russian oil, which will eventually lead to output decreasing.”

Adding to the positive sentiment were comments from authorities in Shanghai, suggesting that China’s worst outbreak of COVID-19 has been brought under effective control following a month-long lockdown.

Millions have been under strict lockdown in the country’s financial hub, weighing heavily on demand for crude by the world’s largest importer.

Investors are also eyeing higher demand from the United States this fall as the U.S. Department of Energy unveiled plans to buy 60 million barrels of crude for its emergency stockpiles.

“The DOE has also made it clear that this would be the first tranche and that there would be more to follow,” ING added. “The U.S. administration believes that announcing this refilling plan will help encourage production as it will guarantee demand for crude oil in the years ahead.”  

The Baker Hughes rig count and the CFTC’s positioning data round off the week later, as usual.

 

Crude Oil Higher on Supply Concerns; EU Lines Up Russia Ban
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Kate Davis
Kate Davis May 06, 2022 11:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Everything the media is a LIE from The president to The war to The rate to The climate. Everything!
André Figueiras
André Figueiras May 06, 2022 9:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
i thought the news were, the embargo its not going to happen because some countries Will ban Russian oil.... but ok its propaganda lol... i ge it
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email