Brent crude futures climbed $2.94, or 2.8%, to $107.91 a barrel by 0746 GMT amid thin trading volume, with China and Japan closed for holidays. West Texas Intermediate crude futures increased $3.02, or 3%, to $105.43 a barrel.
European Commission President Ursula von der Leyen proposed a phased oil embargo on Russia over its war in Ukraine and sanctioned Russia’s top bank to
aggravate Moscow’s isolation.
The Commission’s measures include phasing out supplies of Russian crude within six months and refined products by the end-2022, von der Leyen spoke. She also promised to minimize the influence on European economies.
Investors are also waiting for a piece of information from the U.S. Federal Reserve on Wednesday. It is anticipated to strengthen efforts to bring down high inflation by increasing interest rates and reducing its balance sheet.
Oil prices stay in a holding pattern ahead of EU sanctions and the Fed, Stephen Innes of SPI Asset Management.
Market sources citing American Petroleum Institute figures stated that crude and fuel stocks fell last week in the United States. They said that crude stocks fell by 3.5 million barrels on April 29. This was higher than an expected 800,000-barrel drop estimated in a Reuters poll.
U.S. government data on stocks is due on Wednesday.
On Tuesday, oil prices dropped more than 2% on-demand worries stemming from China’s lengthy coronavirus lockdowns curtailed travel plans during the Labour Day holiday season.
The global manufacturing purchasing managers index leased in April for the first time after June 2020, with China’s lockdowns a key contributor, Caroline Bain, chief commodities economist at Capital Economics, stated in a note.
She said the big picture is unfavorable for commodities demand, adding that rising inflation and higher interest rates reduced spending.
While supply constraints may keep commodity prices boosted for some time, we think subdued demand will weigh on most prices later this year and in 2023, Bain expressed.
On Thursday, the Organization of the Petroleum Exporting Countries and their partners are expected to stick to their policy for another monthly production growth.
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