(MENAFN- Trend News Agency)
Oil prices extended gains on Tuesday after the EU agreed to
slash oil imports from Russia, fuelling worries of a tighter market
already strained for supply amid rising demand ahead of peak U.S.
and European summer driving season, Trend reports with reference to Reuters .
Brent crude for July, which expires on Tuesday, rose $1.13 to a
fresh two-month top of $122.80 a barrel at 0359 GMT. The more
active August contract rose $1.34 to $118.94.
U.S. West Texas Intermediate (WTI) crude futures were trading at
$118.25 a barrel, up $3.18 from Friday's close. There was no
settlement on Monday due to a U.S. public holiday.
Both benchmarks have posted daily gains since Wednesday.
European Union leaders agreed in principle to cut 90% of oil
imports from Russia by the end of 2022, resolving a deadlock with
Hungary over the bloc's toughest sanction yet on Moscow.
'It is definitely very bullish for the oil price, building on
supply tensions. The oil price is now heading to the highs in
March,' said Tina Teng, market analyst at CMC Markets. The
reopening of China is also underpinning prices, Teng added.
Oil prices soared in March to their highest since 2008 and are
up over 55% so far this year.
They should draw further support as demand from China is
expected to pick up after the easing of COVID-19 curbs.
Shanghai has announced an end to its two-month-long lockdown,
and will allow the vast majority of people in China's largest city
to leave their homes and drive their cars from Wednesday.
On the production side, OPEC+ is set to stick to last year's
deal at its meeting on Thursday, with a modest July output hike by
432,000 barrels per day, six OPEC+ sources said, rebuffing Western
calls for a faster increase to lower surging prices.
Members from the group - the Organization of the Petroleum
Exporting Countries and allies led by Russia - maintain that the
oil market is balanced and that the recent price hikes are not
related to fundamentals.
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