Oil Prices Rise Amid Continuing Supply Concerns

HONG KONG - Oil prices rose for a third straight session on Friday, shrugging off global economic growth as fears of tightening supplies prop up prices ahead of an impending European Union embargo on Russian oil.

Brent crude futures rose 88 cents, or 0.8 percent, to trade at 111.78 dollars a barrel at 0641 GMT. U.S. West Texas Intermediate (WTI) crude futures added 84 cents, or 0.8 percent, to trade at 109.10 dollars a barrel.

Reported by Antara, Friday, May 6, Brent and WTI are on track to gain for the second week in a row, supported by the European Union's proposal to cut supplies of Russian crude oil in six months and refined products by the end of 2022. The EU will also ban all shipments. and insurance services for transporting Russian oil. The plan still requires unanimous support from the 27 countries in the bloc.

"There is concern over global growth and what that means for oil demand," said Warren Patterson, who heads ING's commodities research.

"However, the looming EU ban on Russian oil more than offsets this for now, and should therefore limit the downside."

Wall Street stocks fell on Thursday (05/5/2022) as investors worried that aggressive central bank policies around the world aimed at curbing inflation could stifle growth.

Britain's central bank on Thursday (5/5) warned Britain was at risk of a double recession and inflation above 10 percent as it raised interest rates to their highest level since 2009, up a quarter of a percentage point to 1.0 percent.

On the supply side, the Organization of the Petroleum Exporting Countries, Russia and allied producers, known as OPEC+, agreed as expected for a moderate monthly increase in oil production.

Ignoring calls from Western countries to raise production more, OPEC+ agreed to increase June output by 432,000 barrels per day, in line with its plans to ease restrictions put in place when the pandemic hit demand.

Investors are also eyeing higher demand from the United States this fall, as Washington announced plans to buy 60 million barrels of crude for its emergency stockpile.

A US Senate panel put forward a bill that could expose OPEC+ to lawsuits for collusion in increasing oil prices. Congress has failed to pass a version of the law for more than two decades, but lawmakers are concerned about rising inflation and high gasoline prices.