Apr 12, 2022 03:01AM ET
By: AnalysisWatch
Oil prices rose on Tuesday on easing demand concerns in China after Shanghai eased some COVID-19-related restrictions and OPEC warned that it would not be able to boost output enough to make up for a Russian supply shortfall.
Brent crude futures were up $2.98, or 3.03 percent, at $101.46 per barrel at 02:40 AM ET, while West Texas Intermediate crude was up $3.18 percent, at $97.29 per barrel.
Both contracts were down about 4% on Monday.
Shanghai said on Monday that more than 7,000 housing units had been downgraded to lower-risk areas after 14 days with no new infections reported, and districts have since announced which complexes may be opened.
It said the partial easing of closures in Shanghai had partly eased the downward pressure caused by concerns about Chinese oil demand.
Some European Union member states are working on proposals for an EU oil embargo against Russia following its invasion of Ukraine, some foreign ministers said on Monday.
But there is currently no agreement among members on oil from Russia, which has described its actions in Ukraine as a "special operation."
Tuesday's surge in oil markets also followed a warning from the Organization of Petroleum Exporting Countries (OPEC) that some 7 million barrels a day of Russian exports of crude oil and other liquid products could be lost as a result of sanctions or voluntary measures, and that it would be impossible to replace those volumes.
IEA member countries plan to release about 240 million barrels over the next six months to calm the market, including 180 million barrels from U.S. inventories at 1 million barrels per day starting in May.
A preliminary Reuters poll showed U.S. crude inventories likely rose by 1.4 million barrels in the week ended April 8, after falling for three consecutive weeks.
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