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Title: Oil extends rally as EU members weigh Russian ban, Houthis target Saudi

Mar 22, 2022 03:36AM ET

By: AnalysisWatch

Oil prices rose on Tuesday as some European Union members discussed the possibility of an oil embargo on Russia and the market was rocked by attacks on Saudi energy and water refineries by the Houthi group in Yemen, which is allied with Iran.

West Texas Intermediate crude futures rose $2.28, or 2.03%, to $114.4 a barrel on the New York Mercantile Exchange, while Brent crude futures rose $2.89, or 2.5%, to $118.51 a barrel on the Intercontinental Exchange as of 4:13 a.m. EDT.

Both contracts gained more than 7% on Monday, as the market was shaken by the prospect of further supply disruptions.

European Union foreign ministers are divided on whether to join the US in imposing sanctions on Russian oil, with some countries, including Germany, saying the bloc is too dependent on Russian fossil fuels.

Prices are rising in response to geopolitical problems in Ukraine and attacks on Saudi Aramco facilities.

Saudi Arabia has warned it will not take responsibility for global supply disruptions due to escalating attacks on its facilities by the Yemeni Houthi movement.

The statement came after the group fired rockets and drones at Saudi Aramco facilities over the weekend, temporarily reducing refinery output.

Analysts said additional concerns about OPEC+ production could exacerbate supply problems.

Meanwhile, US crude stocks were unlikely to change last week, a preliminary Reuters survey showed on Monday.

Analysts estimated gasoline stocks fell by about 2.1 million barrels last week, while distillate stocks, which include diesel and heating oil, were expected to fall by 1.6 million barrels.

The survey was conducted ahead of the American Petroleum Institute's industry group reports to be released at 4:30 p.m. ET on Tuesday.

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