Oil hit its highest in seven weeks on Tuesday, supported by the European Union’s ongoing push for a ban on Russian oil imports that would tighten supply and as investors focused on higher demand from an easing of China’s COVID lockdowns.
EU foreign ministers failed on Monday in their effort to pressure Hungary to lift its veto on the proposed oil embargo. But some diplomats now point to a 30 -31 May summit as the moment for agreement on a phased ban on Russian oil.
Brent crude rose as high as US$115.14, its highest since 28 March and by 0815 GMT was up 46 cents, or 0.4%, to US$114.70. U.S. West Texas Intermediate (WTI) crude slid 26 cents, or 0.2%, to US$113.94.
“Oil prices have remained near multi-week highs this week, supported by surging gasoline and distillate prices in the U.S., and fears around an EU ban on Russian oil imports remaining in play,” said Jeffrey Halley, analyst at brokerage OANDA.
Crude has surged in 2022, with Brent hitting US$139, its highest since 2008, in early March as Russia’s invasion of Ukraine exacerbated supply concerns.
Oil also gained support on Tuesday from hopes of demand recovery in China as it looks to ease COVID restrictions that have hurt its economy.
Shanghai on Tuesday achieved the long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones and set out on Monday its clearest timetable yet for exiting a lockdown now in its seventh week.
Further supporting prices was the “intensifying geopolitical tension” between the EU and Russia as Sweden and Finland seek to join NATO, CMC Markets analyst Tina Teng said.
Also in focus are potential further declines in U.S. fuel inventories. Weekly inventory reports are expected to show a rise in crude stocks and declines in inventories of distillates and gasoline.