The oil prices rose for the third straight session on Friday, shrugging off concerns about global economic growth, while looming European Union sanctions on Russian crude raised the prospect of tighter supply.
The futures of Brent rose $1.75, or 1.58%, to $112.65 a barrel by 11:59 GMT, while US crude West Texas Intermediate (WTI) gained $1.57, or 1.45%, to settle at $109.83 a barrel.
Brent and WTI are on track to rise for the second week in a row, buoyed by the European Union’s proposal to phase out supplies of Russian crude oil in six months and refined products by the end of 2022. It would also ban all shipping services. and insurance for the transportation of Russian oil.
The European Union is tweaking its sanctions plan in a bid to bring in reticent states, three EU sources told Reuters on Friday.
“The European Union’s impending embargo on Russian oil looks set to cause a sharp collapse in supply. In any case, OPEC+ is unwilling to help, even if rising energy prices cause damaging inflation levels” said PVM analyst Stephen Brennock.
Ignoring calls from Western countries to increase output, the Organization of the Petroleum Exporting Countries, Russia and allied producers, a group known as OPEC+maintained its plan to increase its June production target by 432,000 barrels a day.
However, analysts expect the group’s actual output increase to be much lower due to capacity constraints.
Investors are also on the lookout for increased demand from the United States this fall, as Washington has unveiled plans to buy 60 million barrels of crude for its emergency reserves.
Concern about demand in the face of signs of weakening in the world economy limited the rise in prices.
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