LAST UPDATE 13:06
Oil prices are rising amid easing demand concerns in China as Shanghai lifted some restrictions on the coronavirus and OPEC warned it would be impossible to boost output enough to offset the loss of Russian share.
Brent futures rose 3.03%, or $ 2.98, to $ 101.46 a barrel, and US West Texas Intermediate rose 3.18%, or $ 3, to $ 97.29 a barrel.
Shanghai said more than 7,000 housing units had been classified as low-risk areas, with no new cases reported for 14 days, and districts have since announced which areas could be reopened.
“The market climate is changing frequently, both in terms of supply and demand,” said a Vanda Insights analyst.
The European Union is preparing proposals to impose an embargo on Russian oil after its invasion of Ukraine, as stressed by EU foreign ministers.
However, there is currently no agreement between its members on crude from Russia.
“The oil market remains vulnerable to a major shock if Russia imposes sanctions on energy sources, and the risks remain on the table,” said an OANDA analyst.
Today’s rise also comes after OPEC warned that some 7 million barrels a day of Russian oil and other exports could be lost due to sanctions and that it would be impossible to replace those volumes.
Gas prices are also on the rise, after seven falling sessions, with Russian supplies through Ukraine expected to decline on Tuesday.
Orders fell to about 68% of the quantity that Gazprom can send under the transit agreement.
The Russian company reiterated that the flows are in line with customer requests. Supplies via the Nord Stream pipeline were almost full capacity.
While Russian missions have not yet been affected by the war in Ukraine, rising even above pre-invasion levels a few days ago, they have been under tight control for months.
European gas prices reflect a 20% -40% premium due to the risk of disruptions, according to Morgan Stanley.
Futures contracts in the Netherlands rose 2.8% to 102.91 euros per megawatt hour, while the UK contract rose 3.5% to 220.51 pence.
Source: Capital
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