Oil on Friday closed at a six-week high on signs that the market is tightening, as members of the EU moved closer toward banning Russian crude.
West Texas Intermediate for June delivery rose 1.39 percent to US$109.77 a barrel, up 4.85 percent on the week and its first back-to-back weekly gain in two months.
Brent crude for July delivery increased 4.85 percent to US$112.39 a barrel, gaining 2.79 percent from a week earlier.
The EU intends to ban Russian crude in six months and oil products by the end of the year to punish Moscow for its war on Ukraine.
The bloc has proposed giving Hungary — which has pushed back against an embargo — and Slovakia an extra year to comply, people familiar with the matter said on Friday.
“Crude prices just want to head higher as energy traders completely fixate over the looming European sanctions on Russian oil,” Oanda Corp senior market analyst Edward Moya said. “No one wants to be on the wrong side of a major crude supply disruption headline, so whatever oil price dips that happen will be short-lived.”
The US government on Thursday said that it would begin buying crude to replenish the nation’s reserve.
While the process could begin in the fall, actual deliveries would not take place until later.
Oil has rallied more than 40 percent this year as the invasion of Ukraine upended commodity markets.
This week’s advance — the third in the past four — has come despite lingering concerns that lockdowns in China to combat COVID-19 outbreaks are hurting consumption.
“Chinese oil demand has been down 1.5 million barrels per day,” due to the lockdowns, S&P Global Inc vice chairman Dan Yergin said.
Yet knowing China’s ways, it is expected to stage a strong rebound and that would affect all commodity prices, he added.
This week, OPEC and its allies did announce another modest increase in supply, but there is doubt the alliance will be able to deliver the full volume.
Oil-product markets have also shown signs of strength this week, especially in the US, where nationwide holdings of gasoline and diesel have dropped. Gasoline futures are trading near a record high after a weekly gain of about 6 percent.
Additional reporting by staff writer
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