According to Reuters, oil prices continue on Tuesday amid tough bans on oil from Russia, a weakening lockdown in China and growing demand ahead of the summer car season in the United States and Europe.
Brent crude for July, which expires on Tuesday, rose $2.31, or 1.9%, to $123.98 a barrel by 1338 GMT, after earlier rising to $124.64 – its highest since March 9. The August contract hit a high of $120.80.
Crude oil 1y graph by Tradingview
Supply shortages are rising as the premium on August Brent crude oil contracts was about $15 a barrel, hitting a 9-week high from the half-year spread.
U.S. West Texas Intermediate (WTI) crude traded at $119.18 a barrel, hitting its highest since March 9, up 3.6% from Friday’s close.
Both July load contracts are set to end in May with price increases for the sixth straight month.
The European Union has come to an agreement to reduce Russian oil imports by 90%, and this is the bloc’s toughest sanction in 3 months, since the invasion of Ukraine. The ban will be implemented in stages.
As PVM analyst Tamash Varga noted: “Since two-thirds of crude oil exports from Russia come from sea transportation, about 1.5 million barrels per day (barrels per day) of oil will need to be replaced by supplies from the EU.
This volume is actually closer to 2.1-2.2 million barrels per day, since both Poland and Germany plan to abandon pipeline purchases by the end of the year. “
The increase in oil production does not yet correspond to demand, in July it is planned to increase by 432,000 barrels per day, as reported in OPEC +.
The demand for oil increased even after Shanghai ended the quarantine and residents of the multimillion-dollar city of China will be able to leave their homes and drive cars from Wednesday.
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