Oil prices were set for a second consecutive weekly increase early on Friday, as the EU’s proposal to ban imports of all Russian crude and oil products by the end of the year trumped market concerns about slowing Chinese oil demand amid the harshest COVID restrictions since the initial wave of the pandemic.
Putting up in Asian trading overnight, WTI Crude was topping $110 per barrel and Brent Crude was over $113 a barrel (as of 7:50 a.m. EST), with both benchmarks pushed higher by several pieces of bullish news this week.
The European Commission on Wednesday officially proposed a full ban on Russian crude and oil product imports by the end of the year.
“Let us be clear: it will not be easy. Some Member States are strongly dependent on Russian oil. But we simply have to work on it. We now propose a ban on Russian oil. This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined,” European Commission President Ursula von der Leyen said at the European Parliament.
Some EU members, most notably Hungary, are pushing against a full embargo on Russian oil, and talks among member states continue as they look to reach a consensus since the Commission’s proposal requires the approval of all 27 EU countries.
On Thursday, OPEC+ ended one of its shortest meetings on record with no changes to its production plan, aiming to boost crude oil production in June by 432,000 barrels per day (bpd), in a move widely expected by the market. While OPEC+ is sticking to its policy of modest monthly increases, many of its members are not pumping to their quotas and the group overall is estimated to be around 1.5 million bpd below its quota.
“Lagging production is unlikely to change anytime soon, particularly given the weaker demand for Russian oil, which will eventually lead to output decreasing,” ING strategists Warren Patterson and Wenyu Yao said on Friday, commenting on the OPEC+ meeting and expected production from the alliance going forward.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More