Brent crude futures fell $3 to $108.91 a barrel this evening, after oil prices rose on Wednesday, supported by expectations that easing anti-Covid-19 restrictions in China would boost demand and as supply concerns increased.
Brent crude futures rose $1.92, or 1.7%, to $113.85 a barrel by 1225 GMT. West Texas Intermediate crude futures rose $2.69, or 2.4 percent, to $115.09 a barrel, recouping some of its losses in the previous session.
And hopes for easing the closures in China have boosted expectations of a recovery in demand. Sources said today, Wednesday, that the authorities in China allowed the resumption of work in 864 financial institutions in Shanghai, a day after the city achieved zero new infections outside the quarantine areas for three consecutive days. China has also relaxed some rules for testing for the disease for people from the United States and other travelers.
The oil market was supported by growing concerns about supply shortages. An internal report by OPEC + on Tuesday showed that Russia’s production of crude in April fell by about nine percent from the previous month, as Western sanctions limited Moscow’s exports.
What limited the price hike, however, was news of a possible US easing of sanctions against Venezuela to allow Chevron to negotiate oil licenses with the national producer there.
The European Union’s failure to persuade Hungary to drop its opposition to a proposed Russian oil embargo also added to pressure on prices, but some diplomats expect an agreement on a gradual EU ban on Russian oil at a summit at the end of this month.
European Commission President Ursula von der Leyen said on Wednesday that the European Union plans to mobilize investment of up to 300 billion euros by 2030 to end its dependence on Russian oil and gas.
Market sources, citing data from the American Petroleum Institute, said on Tuesday that US crude and gasoline stocks fell last week.