Title: Oil Up, Draw in U.S. Crude Oil Supplies Signal Tight Market

Mar 23, 2022 01:35AM ET

By: AnalysisWatch

Oil prices rose in Asia on Wednesday morning, as a drop in US crude inventories raised concerns about a global supply shortage in the face of new sanctions against Russia.

Brent oil futures were up 1.2 percent to $116.87 at 1:29 a.m. ET, after falling 14 cents the day before.WTI futures rose 1.38% to $110.78 after dropping 36 cents on Tuesday.

The prospect of further sanctions against Russia over its invasion of Ukraine on February 24 is keeping markets on edge. US President Joe Biden is likely to announce those sanctions when he meets European leaders in Brussels on Thursday. Prices also fell on Tuesday as it is highly unlikely that the European Union will agree to a ban on Russian oil.

"We expect continued volatility for the rest of the week and especially for the NATO summit on Thursday," Vandana Hari, founder of Vanda Insights, told Reuters.

There may be some easing for the market if the EU abandons the idea of a ban on Russian oil imports, but supply concerns will remain elevated as long as peace talks between Russia and Ukraine remain deadlocked, "she added.

Crude supply data released Tuesday by the American Petroleum Institute showed a drop of 4.280 million barrels for the week ending March 17. Investing.com forecasts predicted a build of 25,000 barrels, compared with a build of 3.754 million barrels the previous week.

Investors are now waiting for crude oil inventory data from the U.S. Energy Information Administration, which is expected later today.