Oil climbs on tight supply, prospect of EU ban on Russian supply
The Hindu
‘All of the variables are pointing to further gains in oil prices going ahead’
Oil prices rose on Thursday, extending a cautious rally this week on signs of tight supply while the European Union (EU) wrangles with Hungary over plans to ban imports from Russia, the world's second-largest crude exporter, after it invaded Ukraine.
Brent crude futures gained 87 cents, or 0.8%, to $114.90 a barrel at 1001 GMT. U.S. West Texas Intermediate (WTI) crude futures climbed $1.02, or 0.9%, to $111.35 a barrel.
A bigger-than-expected drawdown in U.S. crude inventories in the week to May 20, following soaring exports, buoyed the market on Wednesday. U.S. refiners picked up the pace of activity, boosting overall capacity use to the highest levels since before the pandemic.
"The fundamental backdrop ... is getting price supportive as the driving season is approaching and will turn even more bullish once the EU sanctions on Russian oil sales are endorsed by all parties involved," PVM Oil's Tamas Varga said.
European Council President Charles Michel on Wednesday said he was confident that an agreement can be reached before the council's next meeting on May 30.
Germany's economy minister Robert Habeck said the EU can still strike a deal on an oil embargo in the coming days or look to "other instruments" if no agreement is reached.
However, Hungary remains a stumbling block to the unanimous support needed for EU sanctions. Hungary is pressing for about 750 million euros ($800 million) to upgrade its refineries and expand a pipeline from Croatia to enable it to switch away from Russian oil.
The decline in India’s net foreign direct investment (FDI) inflows, which have dropped almost 31% to $25.5 billion over the first ten months of 2023-24, is in line with the slowdown in such investments to developing countries, the Finance Ministry has said, while holding out hope for an uptick in investments this year.