WTI rises to $105.50 on EU reports of a Russian oil embargo deal

• WTI rose to its highest level since last Tuesday above $105.00 and points to a retest of recent highs near $110.
• Traders cited a WSJ report alleging that the EU is nearing a deal on an import embargo on Russian oil as price support.

oil prices reached their highest levels since last Tuesday, with WTI futures of the first month rising above $105.00 a barrel, with traders citing a WSJ report alleging that the EU is about to agree to implement a blanket ban. on imports of Russian oil. At current levels in the mid-$105.50s, WTI is trading up nearly $3.40 on the day, with tailwinds also coming from a decent bounce in US equity markets amid bullish optimism. the earnings.

Regarding the latest reports of an EU embargo on Russian crude, the WSJ reported that Germany has withdrawn its opposition to an embargo on Russian oil imports. According to the WSJ, this “clears the way” for a broader EU ban on oil imports from Russia, given that Berlin had been one of the main opponents of the embargo until now. The change in stance comes after Russia cut off gas flows to Poland and Bulgaria earlier in the week after the two countries refused to pay for gas in rubles, as Russia has demanded. EU officials accused Moscow of using fossil fuels to blackmail Europe for its support of Ukraine.

Fears about the impact of an EU embargo on Russian oil are, for now, helping to allay fears about weak demand as a result of lockdowns in China as restrictions in Beijing are extended and after that the latest GDP figures for the first quarter of 2022 from the US are weaker than expected. WTI bulls will be watching for a retest of last week’s highs near $110 and oil could well be helped in this way if EU-Russia tensions continue to rise.

Elsewhere, the focus will return to OPEC+ next week, with the cartel scheduled to meet on May 5 and likely to agree to another 400,000 barrels per day production increase in June. Analysts note that OPEC+’s slow production ramp-up policy, which many nations have been struggling to follow anyway, does not come close to offsetting the loss of up to 3 million bpd in Russian output expected in May. due to sanctions.

Technical levels