Title: Oil prices inch lower as EU's Russian oil ban stalls
May 17, 2022 02:21AM ET
Oil prices eased slightly on Tuesday as Hungary resisted the European Union's push for a ban on Russian oil imports, which would tighten global supplies, and investors took profits from the recent rally.
At 02:02 AM ET, Brent crude futures were down 11 cents, or 0.1%, at $114.13 a barrel, and U.S. West Texas Intermediate (WTI) crude futures were down 22 cents, or 0.2%, at $113.98 a barrel. Both benchmarks gained more than 2% on Monday after rising 4% on Friday.
EU foreign ministers failed Monday in their effort to pressure Budapest to lift its veto of a proposed oil embargo on Russia following the country's invasion of Ukraine. An embargo would require the approval of all EU countries.
On the supply side, U.S. producers are ramping up production to replenish stocks that have shrunk in the wake of Russia's war on Ukraine-which Moscow calls a "special military operation"-and the recovery from the COVID-19 pandemic.
According to the U.S. Energy Information Administration (EIA), oil production in the Permian Basin in Texas and New Mexico, the largest U.S. shale oil producer, is expected to rise by 88,000 barrels per day (bpd) in June to a record 5.219 million bpd.
Analysts, however, said overall price sentiment remained positive due to optimism about China's demand recovery as the country looks to ease COVID restrictions that have hurt its economy.
Shanghai reached the long-awaited milestone of three consecutive days without new COVID-19 cases outside quarantine zones on Tuesday, and on Monday set the clearest timetable yet for ending the lockdown, now in its seventh week.
Prices received further support from "rising geopolitical tensions" between the EU and Russia as Sweden and Finland seek NATO membership, said Tina Teng, an analyst at CMC Markets.