Mar 09, 2022 02:35AM ET
By: AnalysisWatch
Oil prices rose on Wednesday on fears of a possible supply shock due to a ban on Russian oil imports by the United States and signs that some buyers are already rejecting it.
Brent crude futures rose $2.65, or 2.07%, to $130.63 a barrel at 2:20 a.m. ET, after rising 3.9% the previous day.
U.S. West Texas Intermediate crude futures gained $2.21, or 1.79%, to $125.91 a barrel after rising 3.6% on Tuesday.
U.S. President Joe Biden on Tuesday issued an immediate ban on imports of Russian crude and other energy products, while the U.K. said it would phase out imports of Russian oil by the end of 2022 in response to Russia's incursion into Ukraine.
Shell said on Tuesday that it would stop buying Russian oil and phase out its participation in all Russian hydrocarbons, becoming one of the first major Western oil companies to completely divest its Russian stake.
Goldman Sachs, meanwhile, estimates that more than half of the Russian oil shipped from ports remains unsold, and JP Morgan estimates that around 70% of Russia's offshore oil is struggling to find buyers.
Oil prices have risen by more than 30% since Russia, the world's second-largest oil exporter, launched a so-called "special operation" in Ukraine. Fears of further oil supply shortfalls amid escalating sanctions against Moscow have boosted buying, analysts say.
Oil prices rose to their highest level since July 2008 on Monday, with Brent crude at $139.13 a barrel and WTI at $130.50.
U.S. crude stockpiles rose by 2.8 million barrels in the week ended March 4, while analysts had forecast a decline, but gasoline and distillate inventories fell, market sources said, citing data Tuesday from the American Petroleum Institute.
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