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LONDON – Oil hit a seven-week high on Tuesday in support of the European Union’s ongoing pressure on Russia to impose a ban on oil imports that would tighten supplies and investors focused on higher demand as China eased its cowardly lockdown.
European Union foreign ministers have failed in their efforts to pressure Hungary to withdraw its veto over proposed oil sanctions on Monday. Some diplomats, however, now point to a summit on May 30-31 as a moment of agreement on a phased embargo on Russian oil.
Brent crude rose $ 115.14, the highest since March 28, and rose 46 cents, or 0.4%, to $ 114.70 by 0815 GMT. US West Texas Intermediate (WTI) fell 26 cents, or 0.2%, to 113.94.
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“Oil prices have remained near multi-week highs this week, supported by rising petrol and distillation prices in the United States, and fears of an EU embargo on Russian oil imports,” said Jeffrey Haley, an analyst at brokerage OANDA.
Crude oil prices rose in 2022, with Brent reaching 139 139, the highest since 2008, and Russia’s invasion of Ukraine in early March added to supply concerns.
Oil also gained support on Tuesday in anticipation of a recovery in demand in China, as it seeks to ease sanctions on its economy.
Shanghai on Tuesday achieved the long-awaited milestone of three consecutive days where there are no new COVID-19 cases outside the quarantine zone and still has a clear schedule for its seventh week out of the lockdown on Monday.
CMC Markets analyst Tina Teng said “intense geopolitical tensions” between the EU and Russia were even more helpful as Sweden and Finland sought to join NATO.
Also focus is the potential further fall in the US fuel inventory. Weekly inventory reports are expected to show an increase in crude stocks and a decrease in inventory of distilled and gasoline.
The first report from the American Petroleum Institute is scheduled for 2030 GMT. (Reporting by Isabel Kua in Singapore, Yuka Obayashi in Tokyo, Laura Sanicola in New York; Editing by Richard Pulin and Jason Neely)