• Sign up for the Daily Digest E-mail
  • Facebook
  • Twitter
  • LinkedIn

BOE Report

Sign up
  • Home
  • Headlines
    • Latest Headlines
    • Featured Companies
    • Columns
    • Discussions
  • Well Activity
    • Well Licences
    • Well Activity Map
  • Property Listings
  • Land Sales
  • M&A Activity
    • M&A Database
    • AER Transfers
  • Markets
  • Rig Counts
    • CAOEC Rig Count
    • Baker Hughes Rig Count
    • USA Rig Count
  • Industry Data
    • Canada Oil Market Data
    • Canada NG Market Data
    • USA Market Data
    • Data Downloads
  • Jobs

Oil edges up on EU’s proposed Russian oil ban, but weak China data weighs

May 5, 20227:30 AM Reuters0 Comments

Sask oil pumpjack

Oil prices edged higher on Thursday, extending gains from the previous session, as a European Union proposal for new sanctions against Russia, including an embargo on crude in six months, offset concerns over Chinese demand.

U.S. West Texas Intermediate crude futures rose $3.10, or 2.88%, to $110.65 a barrel. 

CL1! chart by TradingView
Brent crude futures had climbed $3.20, or 2.92%, to $113.32 a barrel.

Both benchmarks jumped more than $1 a barrel earlier in the volatile session after gaining more than $5 a barrel on Wednesday.

The sanctions proposal, which was announced by European Commission President Ursula von der Leyen and needs unanimous backing by the 27 EU countries to take effect, includes phasing out supplies of Russian crude in six months and refined products by the end of 2022.

It also proposes to ban in a month’s time all shipping, brokerage, insurance and financing services offered by EU companies for the transportation of Russian oil.

“That’s a likely game changer for oil and refined product markets,” CBA analyst Vivek Dhar said in a note, adding that sanctions on insurance, previously used by the United States and European countries, were effective in limiting Iran’s oil exports.

However, the EU faces the task of finding alternative supplies at a time when energy prices have surged. It imports some 3.5 million barrels of Russian oil and oil products daily and also depends on Moscow’s gas supplies.

A handful of eastern EU countries are concerned that the proposal gives them insufficient time to adapt.

“The most immediate questions are how many countries will receive exemptions, the scope of the additional sanctions measures to curtail Russian oil exports to other key markets, and President Putin’s response to the European action,” Helima Croft, RBC Capital Market’s head of global commodity strategy, said in a note.

“We think the price response to such measures will depend on how far they go in making Russia’s 4.8 million bpd (barrels per day) of global exports unavailable as opposed to unpopular.”

On Thursday, the Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, is expected to agree to raise production targets by 432,000 barrels per day (bpd) for June, four OPEC+ delegates told Reuters. OPEC+ would thereby stick to plans for a gradual ramp-up of monthly production.

OPEC Secretary General Mohammad Barkindo reiterated that it was not possible for other producers to replace Russian supply but expressed concerns about slowing demand for transportation fuels and petrochemicals in world’s top importer, China, because of COVID-19 lockdowns.

A private-sector survey showed on Thursday that China’s services sector activity contracted at the second-steepest rate on record in April under the effect of pandemic measures.

In the United States, crude stocks were up 1.2 million barrels last week after more oil was released from strategic reserves, according to the Energy Information Administration.

Follow the BOE Report
  • Facebook
  • Twitter
  • LinkedIn

Sign up for the BOE Report Daily Digest E-mail

Successfully subscribed

Latest Headlines
  • Canada’s weekly rig count up 15 to 175
  • U.S. drillers add oil and gas rigs for a record 23 months
  • U.S. natgas futures hold near 11-week low as LNG exports decline
  • No plans for extraordinary EU summit on gas prices in July
  • Oil prices rise on tight supply, inventory uncertainty

Return to Home
Alberta Gas
CAD/GJ
Market Data by TradingView

    Report Error





    Note: The page you are currently on will be sent with your report. If this report is about a different page, please specify.

    About
    • About BOEReport.com
    • In the News
    • Terms of Use
    • Privacy Policy
    • Editorial Policy
    Resources
    • App
    • Widgets
    • Notifications
    • Daily Digest E-mail
    Get In Touch
    • Advertise
    • Post a Job
    • Contribute
    • Contact
    • Report Error
    Featured In
    • CamTrader
    • Rigger Talk
    Data Partner
    • Foxterra
    BOE Network
    © 2022 Grobes Media Inc.