By Adedapo Adesanya
Oil prices return to gaining ways on Thursday as supply concerns, as well as geopolitical tensions, offset bearish factors such as worries about economic fears.
Brent crude gained 0.1 per cent or 11 cents to sell for $107.60 per barrel while the United States West Texas Intermediate (WTI) crude rose by 0.45 per cent or 48 cents to $106.2 per barrel.
The European Union (EU) had proposed a comprehensive oil embargo against Russia for the first time, as Moscow continues its war on Ukraine and it hopes Europe will stop importing Russian oil by the end of the year.
European Commission President, Ursula von der Leyen, announced the details of a planned sixth package of sanctions against Russia on May 4, which includes the bold oil move but it has faced opposition from Hungary and Slovakia expressed strong reservations.
Both Hungary and Slovakia received between 75 and 100 per cent of their oil imports from Russia last year.
For a complete ban on Russian oil to be enforced, all 27 member states must vote unanimously on a set of terms, further amend previous decisions and allow the commission to serve as the key enforcer for the regulation.
This seems to be where the market focused even as high Dollar rates, inflationary fears, and weak demand continue to breathe down the market.
In the US, the Consumer Price Index (CPI) showed that inflation in the world’s top economy slowed but did not decline at the rate that most people expect.
As a result, the US Dollar Index (DXY), which tracks the dollar against a basket of major rivals, intensified its rise and achieved fresh cycle highs near 104.55.
In China, prolonged lockdowns continue to impact demand due to the country’s Zero-COVID policy.
Analysts noted that extended lockdowns across China are driving a significant slowdown in the world’s second-largest oil consumer.
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) cut its forecast for growth in world oil demand in 2022 for a second straight month, citing the impact of Russia’s invasion of Ukraine, rising inflation and the resurgence of the Omicron coronavirus variant in China.
