Oil climbs as European Union may ban Russian crude imports

Oil climbs as European Union may ban Russian crude imports

On signals that the European Union is coming closer to a ban on Russian crude oil imports to punish Moscow for its invasion of Ukraine, oil rose for the fourth day, set for its greatest run in a month.

After soaring 18 percent in the previous three days, West Texas Intermediate hit $114 a barrel in early Asian trading.

Crude prices have risen sharply in the aftermath of the invasion, as crude importers rejected Russian cargoes and the United States and the United Kingdom sought to block purchases. 

The EU is Russia’s top purchaser of crude and fuel, and the Kremlin has warned that any restriction would have a significant impact on the market, particularly in Europe.

Oil markets were jittery overnight as the potential of a European ban on Russian oil, as well as the reality of the Ukraine-Russia talks, drove prices skyrocketing.

The fact that oil has continued to surge rapidly even after the EU discarded the idea of imposing an oil embargo on Russia is particularly noteworthy. Tensions are clearly growing once more as little progress toward a settlement in Ukraine is made.

On Tuesday, oil fell below $114 a barrel, giving up part of the previous day’s 7% gain. There is no consensus among EU countries on how to deal with Russian oil.

Members of the European Union divided on whether or not to impose an oil embargo on Russia, despite persisting supply problems limiting the decline. Foreign ministers in the European Union are split on whether to join the US in boycotting Russian oil.

Brent crude touched a new high of $139 per barrel, the most since 2008. A strong dollar makes crude costlier for holders of other currencies and reduces risk appetite.

The euro was also under pressure, falling to a near-week low against the greenback. The dollar surged on Tuesday as Federal Reserve Chair Jerome Powell hinted at rate hikes of up to 50 basis points.

The euro went below $1.10 as a result of the Ukraine conflict and rising oil costs.

More at: FXreviewtrading.com

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