- Oil rose to a two-month high above $123 a barrel on Tuesday after the European Union agreed to ban most Russian imports.
- Chinese authorities have eased restrictions in Beijing and Shanghai, adding upward pressure on prices.
- The European Union has agreed to a temporary exemption for pipeline oil imports from Russia, but intends to ban all sea trade.
Oil prices rose to a two-month high of more than $123 a barrel on Tuesday after the European Union agreed to ban most Russian oil imports as part of the sixth round of sanctions.
Meanwhile, authorities in Beijing and Shanghai eased some strict coronavirus-related restrictions in these two Chinese cities, raising the possibility of a recovery in energy demand.
Brent crude, the global price benchmark, was up 1.88% to $123.55 a barrel as of 4AM ET on Tuesday, its highest level since late March.
US benchmark West Texas Intermediate crude rose 3.13 percent to $118.64 a barrel, its highest price since early March.
The rise in oil prices came after European Union leaders reached an agreement to ban imports of Russian oil and petroleum products by sea.
European Union Council President Charles Michel chirp The plan would include 75% of Russia’s oil imports immediately and cover 90% of supply by the end of the year.
The plan envisages a temporary separation of oil delivered via pipeline from Russia to Europe. The non-compliance was a privilege granted by other member states to Hungary, Slovakia and the Czech Republic, which depend on pipeline supplies.
Officials from the 27 EU member states have not yet finalized final details, including the duration of the pipeline exception.
“The announcement of a partial EU ban on Russian oil imports crossed the finish line, sending oil prices higher overnight,” Jeffrey Halley, strategist at trading platform Oanda, said in a note.
“Today’s recovery of PMI data from China, and the recovery of energy consumption by default, means that the recovery continues in Asia,” he said. PMIs are surveys that indicate the strength of the private sector in a country.
Derek Halpini, head of research at MUFG, said higher oil prices had added to inflationary pressures.
“Price gains are around 9% in the past four trading days,” he said. “This will inevitably fuel broader inflation fears and could renew fears that central banks are still behind the curve.”
Continue reading:Buy these 11 undervalued stocks that smashed earnings expectations even as fears of a market crash persist, according to Morningstar.
Source site – 19