Oil prices rose Wednesday as US crude inventories fell and economic sanctions-hit Russia’s exports, raising concerns over global supply shortages.
Brent crude futures rose $1.77, or 1.53%, to $117.25 a barrel at 0443 GMT, after falling 14 cents in the previous session.
West Texas Intermediate (WTI) crude futures rose $1.51, or 1.38%, to $110.78 a barrel after losing 36 cents on Tuesday.
The market is tense as more sanctions are expected for Russia, the world’s second-largest exporter of crude oil against its invasion of Ukraine.
Prices fell on Tuesday as the European Union seemed unlikely to agree to ban Russian oil. However, the summit of US and European leaders in Brussels on Thursday will also discuss imposing further sanctions on Russia, including an emergency meeting of NATO.
The volatility in oil prices is expected to continue, till the decisions are taken by Brussel at least. Supply concerns will remain high as long as the Russia-Ukraine peace talks stalemate. If the EU abandons the idea of banning oil imports from Russia, the market may relax a bit.
The latest data from the American Petroleum Institute (API) industry group showed that crude inventories in the United States, the world’s largest oil consumer, fell by 4.3 million barrels in the week ended March 18, contrary to analysts’ forecasts for increases.
The USA and Saudi Arabia are two countries that can balance a collective oil embargo on Russia. However, such an extra supply possibility seems unlikely for either of them at the moment.
Official US inventory data will come from the Energy Information Administration (EIA) on Wednesday.
