Workers walk while oil pumps are seen in the background at the Uzen oil and gas field in the Mangistau region of Kazakhstan, November 13, 2021. REUTERS/Pavel Mikheyev
HOUSTON, April 14 – Oil prices rose on Thursday after an early decline as investors bought short positions ahead of the long weekend and on news that the European Union could gradually introduce a ban on Russian oil imports.
Brent futures were up $2.92, or 2.68%, to $111.70 a barrel. US West Texas Intermediate futures closed up $2.70, or 2.59%, at $106.95 a barrel.
Both contracts posted their first weekly gains in April. For several weeks, prices have been the most volatile since June 2020.
The New York Times reported that the European Union is moving towards a phased ban on Russian oil to give Germany and other countries time to organize alternative suppliers.
A phased ban would force European buyers to “seek alternative sources, some of which will be covered by releases of strategic petroleum reserves in the near future, but more supplies from the ground will be needed in the future,” according to Andrew Lipow of Lipow Oil Associates in Houston , said.
The International Energy Agency warned on Wednesday that from May about 3 million barrels a day of Russian oil could be locked up due to sanctions or buyers voluntarily avoiding Russian cargoes. Continue reading
According to Reuters, major global trading houses plan to limit crude oil and fuel purchases by Russia’s state-controlled oil companies in May. Continue reading
Russia’s Energy Ministry said it was restricting access to its statistics on oil and gas production and exports. Continue reading
Trade will continue to be “a bit jittery” as the war between Russia and Ukraine lingers and countries weigh banning Russian supplies, said Price Futures Group analyst Phil Flynn.
“The big question is going to be how many people want to be short of oil over the long weekend?”
Traders also adjusted their positions on Thursday as US crude oil options for May expire on Thursday.
According to industry experts, despite labor and supply chain constraints, US oil production forecasts are being revised upwards as higher prices lead to more drilling and well completion activity. Continue reading
The number of US oil rigs rose by two this week to 548, the highest since April 2020, energy services company Baker Hughes said in a report.
The US Energy Information Administration reported Wednesday that US oil inventories rose by more than 9 million barrels over the past week, in part due to releases from strategic reserves. In a Reuters survey, analysts had only expected an increase of 863,000 barrels. Continue reading
On the demand side, however, Chinese refiners are set to cut crude throughput by about 6% this month, a magnitude last seen in the early days of the COVID-19 pandemic two years ago to compensate for bulging fuel stocks during the recent lockdowns Industry sources and analysts said.
Reporting by Noah Browning in London, Mohi Narayan in New Delhi, Liz Hampton in Denver; Edited by Jason Neely, Kirsten Donovan, Jan Harvey, David Gregorio, Nick Macfie and Diane Craft