Oil Prices Jump as EU Sanctions on Russia Again
Oil prices jumped in the global commodities market on Thursday following another sanction slammed on Russia by the European Union (EU). Reacting to the supply risk, Brent jumped to $73.45 per barrel while West Texas Intermediate (WTI) increased to $70.01 per barrel.
EU countries agreed on the 15th sanctions package on Wednesday in response to the ongoing Russian assault against Ukraine. While more individuals and organisations are added to the existing sanctions list, the new sanctions will also restrict the activities of ships belonging to third countries operating in support of Russia.
The EU imposes a wide range of restrictions on Russia, including trade, finance, energy, industry, technology, transport, including oil and coal, dual-use and luxury goods, as well as gold and diamonds.
The sanctions also include the ban on shipping crude oil and some oil products transported by sea from Russia to the EU, the exclusion of some Russian banks from the international payment system SWIFT and the suspension of the activities of many broadcasting organisations.
Latest data from the Energy Information Administration (EIA) revealed an increase in demand in the US, lending support to oil prices. US commercial crude oil inventories decreased by 1.4 million barrels to 422 million barrels, during the week ending Dec. 6, EIA said on Wednesday.
The decline in inventory surpassed the market prediction of a 1 million barrels draw. Also, with recent economic indicators, the probability of a 25-basis-point rate cut at the US Federal Reserve’s (Fed) December 18 meeting increased to 98%. Low interest rates are expected to increase the demand for oil by causing the US dollar to lose value against other currencies.
The weakening of the US dollar against other currencies aided the rise in oil prices. The US dollar index, which measures the US dollar’s value against other currencies, fell 0.26% to 106.120. The weak dollar is expected to enhance demand by making oil cheaper for those who use foreign currencies.
US commercial crude oil inventories decreased by 0.3% during the week ending Dec. 6, according to data released by the Energy Information Administration (EIA) late Wednesday. Inventories fell by around 1.4 million barrels to 422 million barrels, surpassing the market prediction of 1 million barrels decline.
Strategic petroleum reserves, which are excluded from commercial crude stocks, increased by approximately 700,000 barrels to 392.5 million barrels last week, the data revealed. Over the same period, gasoline inventories rose by around 5.1 million barrels to 219.7 million barrels. #Oil Prices Jump as EU Sanctions on Russia Again
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