News Lifts Oil The EU May Cut Off Russian Oil Imports

In April, both contracts posted their first weekly gain. Prices have been the most volatile in recent weeks since June 2020.

According to the New York Times, the European Union is considering a phased-in embargo on Russian oil to provide Germany and other nations time to secure alternative supply.

A phased-in prohibition would compel European purchasers "to seek alternate sources, some of which are being provided in the short term via Strategic Petroleum Reserve releases, but in the future, more supplies from the ground would be necessary," Lipow Oil Associates' Andrew Lipow said in Houston.

The International Energy Agency warned on Wednesday that around 3 million barrels per day of Russian oil might be shut down starting in May as a result of sanctions or importers intentionally avoiding Russian supplies.

According to Reuters, major global trading houses aim to reduce their imports of crude and gasoline from Russia's state-controlled oil corporations in May.

Russia's Energy Ministry said that access to its data on oil and gas production and exports will be restricted.

Trade will remain "a little anxious" while the conflict between Russia and Ukraine raged on and nations considered banning Russian imports, Price Futures Group analyst Phil Flynn said.

"The key issue will be how many individuals want to be oil short heading into the long weekend."

Traders also changed their positions on Thursday, when May crude oil options in the United States expire.

According to industry analysts, US oil production predictions are being revised upward despite labor and supply chain restrictions, as higher prices stimulate additional drilling and well completion activities.

US oil rigs increased by two to 548 this week, the highest level since April 2020, according to energy services company Baker Hughes.

The US Energy Information Administration said on Wednesday that the United States' oil reserves increased by more than 9 million barrels last week, owing in part to strategic reserve releases. According to a Reuters survey, analysts expected just an 863,000-barrel gain.

On the demand side, Chinese refiners are set to reduce crude throughput by about 6% this month, a level last seen in the early days of the COVID-19 pandemic two years ago, industry sources and analysts said. The move is intended to relieve pressure on bulging fuel inventories following recent lockdowns.