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Oil climbs above $121 a barrel as China eases restrictions, EU meets

Commodities May 30, 2022 02:25PM ET
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By Nia Williams

(Reuters) -Oil prices climbed above $121 a barrel on Monday, hitting a two-month high as China eased COVID-19 restrictions and traders priced in expectations that the European Union will eventually reach an agreement to ban Russian oil imports.

Trading activity was muted due to a public holiday in the United States.

The Brent crude futures contract for July, which will expire on Tuesday, settled up $2.24, or 1.9%, at $121.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures were up $1.99, or 1.7%, to $117.06 a barrel at 18.03 GMT, extending solid gains made last week.

"One reason being cited for this is the imminent lifting of coronavirus restrictions in Shanghai, which is sparking hopes that oil demand will pick up again in China," analysts at Commerzbank (ETR:CBKG) said in a note to clients.

Shanghai announced an end to its two-month-long COVID-19 lockdown, and will allow the vast majority of people in China's largest city to leave their homes and drive their cars from Wednesday.

Meanwhile, the EU is meeting on Monday and Tuesday to discuss a sixth package of sanctions against Russia for its invasion of Ukraine, which Moscow calls a "special military operation."

"Europe has been haggling about this for the better part of a month, but increasingly the market is pricing (additional sanctions) in as a risk," said Daniel Ghali, senior commodity strategist at TD Securities in Toronto.

EU countries failed to agree on a Russian oil import ban despite last-minute haggling before the summit got under way in Brussels. But leaders of the 27 EU countries will agree in principle to an oil embargo, a draft of their summit conclusions showed, while leaving the practical details and hard decisions until later.

Any further ban on Russian oil would tighten a crude market already strained for supply amid rising demand for gasoline, diesel and jet fuel ahead of the peak summer demand season in the United States and Europe.

Underscoring market tightness, the Organization of the Petroleum Exporting Countries and allies including Russia, a group dubbed OPEC+, are set to rebuff Western calls to speed up increases in output when they meet on Thursday.

They will stick to existing plans to raise their July output target by 432,000 barrels per day, six OPEC+ sources told Reuters.

Oil climbs above $121 a barrel as China eases restrictions, EU meets
 

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Comments (14)
sharath naik
agsn May 30, 2022 5:55PM ET
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all these eu politicians are achieving right now is driving us price of oil and help fund Russia even more.
jonathan seagull
jonathan seagull May 30, 2022 5:55PM ET
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Fine with me getting richer
John Berry
John Berry May 30, 2022 5:14PM ET
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Rock and roll baby
Baer Markit
Baer Markit May 30, 2022 3:09PM ET
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Stop driving big trucks and stop blaming government for all your problems.
Reginald Bowler
Reginald Bowler May 30, 2022 2:49PM ET
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Sanctions are worse than useless. They are hurting us, and will hurt people globally, while due to the shocking increase in prices, while Russia's oil sales are down 10%, their revenue is up by 50%. Lukoil's even said that they should reduce output by 30% to increase revenue further, while at the same time making savings in transport costs due to reduced volume. Gas revenues are also up. Hopeless; while we and others hurt, Russia and other oil and gas producers profit.
André Figueiras
André Figueiras May 30, 2022 1:19PM ET
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he is living in a another dimension lol
Taregh Abedzadeh
Taregh Abedzadeh May 30, 2022 1:19PM ET
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Lol you made me laugh, thank you
jonathan seagull
jonathan seagull May 30, 2022 1:19PM ET
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I dunno another dimension but certainly metaverse
Eagle Gon
Eagle_PT May 30, 2022 10:19AM ET
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fake pump news
Tomek Mi
Tomek Mi May 30, 2022 9:54AM ET
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where did you see 120 lunatics
Max Dividend
MaxDividend May 30, 2022 9:45AM ET
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oil has not treaded above $120
Sandeep Roy
Sandeep Roy May 30, 2022 7:35AM ET
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how is this app
Nonthiphat Sukwasana
Nonthiphat Sukwasana May 30, 2022 7:22AM ET
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WAR?
 
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