Oil gains 5% for the week as EU bans dominate crude trading behavior

the European Unionthe announcement earlier this week of tough crude oil bans Russia for his invasion of Ukraine continued to dominate trading behavior on Friday, with the result that two key benchmarks connected more daily wins as well as another set of weekly wins, to the tune of approximately 5 percent.

West Texas Intermediate added $1.51or 1.4%for $109.77 per barrel, while Brent rose $1.49or 1.3%settle at $112.39 per barrel.

For the week, WTI gained around 5 percentbrent almost 4 percent.

Phil Flynnsenior market analyst at Price Futures Group Inc.said: “In the short term, oil fundamentals are bullish and it is only fears of a coming economic slowdown that are holding us back.

“A tougher sanction on Russia appears to be more bullish as the EU moves closer to cutting off Russian oil and WE moves to further suppress Russia.

Stephen Brennocksenior analyst at PVM Oil Associates Ltd., added: “The impending EU embargo on Russian oil has the makings of an acute supply shortage; there is now growing concern that Europe could run out of diesel.

However, the effectiveness of the embargo could be compromised: Victor Orbanprime minister of Hungary, rejected the EU’s proposed ban as it stands, saying it risks ruining its united front against Russia if it tries to impose the bans by the end of this year as hoped; Orban wants a five-year exemption for his country before giving his blessing to the bans.

Making matters worse and ignoring calls from Western nations to increase production, the Organization of Petroleum Exporting Countries (OPEC) and its allies remained firm in their intention to raise their June production target by 432,000 barrels per day (bpd) – and experts believe the volume will be much lower.

Jeffrey HalleySenior Asia-Pacific Market Analyst at OANDA, mentioned“There is no chance that some members will fill this quota as production challenges impact Nigeria and other African members.

Meanwhile, the United States was almost forgotten in Friday’s exchanges Department of EnergyThe plan to begin buying oil to fill the nation’s emergency reserve, a process that will involve a tender for 60 million barrels this fall, although actual purchases won’t take place for some time in the future, according to to someone familiar with the subject.

The plan follows Washington ordering the release of 180 million barrels of oil a day for six months in another effort to rein in oil and gas prices – which from a consumer perspective remain flat despite the effort.

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