SINGAPORE: Oil prices climbed on Monday, hitting their highest in more than two months, as merchants waited to see if the European Union would attain an settlement on banning Russian oil imports to sanction Moscow for its invasion of Ukraine.
The Brent crude futures contract for July, which expires on Tuesday, was up 37 cents, or 0.3%, at $119.80 a barrel at 0534 GMT, after rising to as excessive as $120.50 earlier in the session. The more lively Brent contract for August rose 67 cents, or 0.6%, to $116.23 a barrel.
Meanwhile, U.S. West Texas Intermediate (WTI) crude futures jumped 78 cents, or 0.7%, to $115.85 a barrel, extending strong beneficial properties made final week.
The EU is because of meet on Monday and Tuesday to debate a sixth package deal of sanctions towards Russia for its invasion of Ukraine, actions Moscow calls a “particular army operation”.
“If we take a look at the current worth motion, plainly market has factored in that the European Union could attain a deal on some type of restrictions on Russian crude,” mentioned Madhavi Mehta, commodity analysis analyst at Kotak Securities.
“We may even see additional upside provided that it’s a full ban. Any watered-down deal or one which incorporates exemptions could not have a lot constructive impression,” she added.
EU governments did not agree on an embargo on Russian oil on Sunday, however will proceed talks on a deal to ban seaborne deliveries of Russian oil whereas permitting deliveries by pipeline, ahead of the summit on Monday afternoon, officers mentioned.
Any additional ban on Russian oil would tighten a crude market already strained for provide amid rising demand for gasoline, diesel and jet gas ahead of the height summer season demand season in the United States and Europe.
Sky-high refining margins for diesel and gasoline in Europe and the United States have despatched prices for some sorts of bodily crude oil to file highs, based on merchants.
Underscoring market tightness, the Organization of the Petroleum Exporting Countries and allies together with Russia, collectively known as OPEC+, are set to rebuff Western calls to hurry up will increase in their oil output additions once they meet on Thursday. They will follow current plans so as to add 432,000 barrels per day in July, six OPEC+ sources informed Reuters.
The oil market was additionally on edge after Iran on Friday mentioned its navy had seized two Greek oil tankers in retaliation over the confiscation of Iranian oil by the United States from a tanker held off the Greek coast.
“This raises the spectre of additional disruptions to grease flows by means of the Strait of Hormuz, which carries a 3rd of the world’s commerce,” ANZ Research analysts mentioned in a observe.
Oil prices had been additionally supported by a fall in the U.S. greenback as buyers pared expectations for aggressive U.S. charge hikes and as fears eased a couple of world recession. A weaker greenback makes oil inexpensive for importers holding different currencies. – Reuters
