Oil prices firmed on Wednesday after European Union leaders agreed to a partial and phased ban on Russian oil and as China ended its COVID-19 lockdown in Shanghai.
Brent crude was up $1.30, or 1.1 percent, at $116.90 a barrel by 1149 GMT. US West Texas Intermediate (WTI) crude rose $1.05, or 0.9 percent, to $115.72.
Both benchmarks registered gains over May, marking the sixth straight month of rising prices.
“The mood on the oil market is seemingly turning ever more bullish,” said Julius Baer analyst Norbert Rucker. “Europe’s embargo and China’s partial reopening is fueling supply fears and lifting oil prices.”
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EU leaders agreed in principle on Monday to cut 90 percent of oil imports from Russia by the end of this year, the bloc’s toughest sanctions yet since the start of the invasion of Ukraine, which Moscow calls a “special military operation.”
Once fully adopted, sanctions on crude will be phased in over six months and on refined products over eight months. The embargo exempts pipeline oil from Russia as a concession to Hungary and two other landlocked Central European states.
“We maintain our view that, given time, Russia will be able to redirect most of its exports and peg maximum impact on Russian production at 1.5 million barrels per day,” JP Morgan said in a note on Wednesday.
Sources told Reuters that Russian oil companies led by Rosneft this month plan to re-open wells that they had shut owing to Western sanctions.
In China, Shanghai’s strict COVID-19 lockdown ended on Wednesday after two months, prompting expectations of firmer fuel demand from the country.