Oil prices increased on Thursday extending a cautious advance this week. The European Union (EU) wrangles with Hungary over plans to prohibit imports from Russia following its invasion of Ukraine.May 26 (Reuters)
The market was encouraged on Wednesday by a larger-than-expected decrease in US oil stockpiles in the week ending May 20 which surge in exports.
Analysts said the inventory decrease and the potential of an EU embargo on Russian oil in retribution for Moscow’s “special military operation” in Ukraine were driving up prices.
Brent crude futures for July settlement gained 47 cents, or 0.41%, to $114.50 a barrel.
U.S. West Texas Intermediate (WTI) crude futures for July delivery climbed 53 cents, or 0.48%, to $110.86 a barrel.
Even in the absence of a legal prohibition substantially less Russian oil is available on the market. as buyers and trading houses avoid interacting with Russian crude and gasoline suppliers.
However, Hungary continues to be a stumbling barrier in obtaining the necessary unanimous support for EU penalties. Hungary is requesting 750 million euros ($800 million). They want to improve its refineries and construct a pipeline from Croatia in order to transition away from Russian oil.
According to ANZ analysts shipments from Baltic ports are traveling longer distances to Asian refineries. While deliveries to the Netherlands and France have all but ceased.
On Wednesday, European Council President Charles Michel expressed confidence that a deal may be reached before the council’s next meeting on May 30.
Sugandha Sachdeva said that “Shanghai is preparing to reopen after 2 month shutdown. While the U.S. peak driving season begins with Memorial Day weekend. Which could provide a boost to oil demand.”
According to ANZ analysts, shipments from Baltic ports are traveling longer distances to Asian refineries, while deliveries to the Netherlands and France have all but ceased.
Other variables are also pointing to additional gains in oil prices.
“All of the indicators point to additional gains in oil prices in the near future.”
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