EU’s possible ban on oil from Russia damps prices

London — Oil prices rose on Thursday on concerns about supply as the EU mulls a potential ban on Russian oil imports, days after diminished supplies from Libya rocked the market.

Brent crude futures rose $1.11, or 1%, to $107.91 a barrel at 08.52 GMT. West Texas Intermediate gained 87c, or 0.9%, to $103.06.

Analysts said market volatility is likely to pick up again soon, with the EU still weighing a ban on Russian oil for its invasion of Ukraine.

Libya, a member of Opec, on Wednesday said the country was losing more than 550,000 bbl/day of output due to blockades at major fields and export terminals.

The oil market remains tight with Opec, and allies led by Russia, collectively known as Opec+, struggling to meet their production targets and with US stockpiles down sharply in the week ended April 15.

“Global supply capacity for oil remains limited,” UBS said in a note. “With only two countries in the Opec+ alliance holding significant spare capacity — Saudi Arabia and the UAE — the group is sticking to a cautious approach in unwinding pandemic-related production cuts.”

The outlook for demand in China continues to weigh on the market, as the world’s biggest importer slowly eases strict Covid-19 curbs that have hit manufacturing activity and global supply chains.

Meanwhile, the Caspian Pipeline Consortium’s Black Sea terminal could return to full capacity this week, Kazakh energy minister Bolat Akchulakov said on Wednesday.

“The resumption of crude deliveries will be somewhat offset by continuing outages in Libya and the likelihood of more Russian crude getting locked out of the market in the face of an EU ban,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Reuters