The crude oil prices extended their gains on Thursday on supply concerns, after the European Union presented its plans to impose new sanctions on Russiaincluding an embargo on crude oil in six months, offsetting concerns about weakening Chinese demand.
At 10:07 GMT, crude Brent It was up 36 cents, or 0.3%, at $110.50 a barrel. US crude West Texas Intermediate it was up 4 cents, or less than 0.1%, at $107.85. Both benchmarks gained more than $5 a barrel on Wednesday.
The sanctions proposal, which needs the unanimous support of the 27 EU countries, also includes the progressive elimination of imports of Russian refined products by the end of 2022 and a ban on all shipping and insurance services for the transport of russian oil.
“The oil market has not fully assessed the possibility of an EU oil embargo, so it is to be hoped that the crude oil prices rise in the summer months (boreal) if the law is voted,” said the head of oil market analysis at Rystad EnergyBjørnar Tonhaugen.
The French Minister for the Environment and Energy, Barbara Pompiliwas confident that EU member states will reach a consensus on sanctions by the end of the week.
The Secretary General of OPEC, Mohammad Barkindoreiterated that it is not possible for other producers to substitute the russian offerbut expressed concern about slowing demand for transportation fuels and petrochemicals in the world’s top importer, China, due to prolonged lockdowns over the Covid-19.
In USACrude stocks rose by 1.2 million barrels last week after more oil was released from strategic reserves, according to the Energy Information Administration.