(New York) Oil continued to rise on Friday, still driven by the proposed European embargo on Russian black gold, even if Hungary is dragging its feet.
A barrel of Brent North Sea oil for July delivery rose 1.34% to $112.39.
The barrel of American West Texas Intermediate (WTI) for June delivery gained 1.39% to 109.77 dollars.
During Wednesday’s presentation of a sixth package of sanctions against Russia, European Commission President Ursula von der Leyen proposed a phased ban on oil imports.
A proposal to which Hungary opposed, judging that such a measure would “completely destroy the energy security” of the country.
“The European Union, with its rules of unanimity, will never achieve full application of the embargo” by all its members, “but what it does will still represent a big reduction and leave traces” for Russia, commented Bill O’Grady of Confluence Investment.
“If no agreement is reached this weekend, I will have to convene an extraordinary meeting of EU foreign ministers next week, after Europe Day,” warned EU foreign minister Josep Borrel.
But for Bill O’Grady, the European Union will “manage to conclude something this weekend”. “They will give a pass to Hungary, which is not ideal, but if Germany, France and other major countries completely cut off Russian oil imports, it is going to be a huge problem for the EU. Russian industry and no doubt lead to permanent production losses,” warns the Confluence Investments analyst.
These expectations come in a market that has tightened this week, particularly in terms of refined products, while American refineries did not run at full speed the week before, the analyst further underlines.
“At the same time, signs of a weakening global economy have multiplied,” which could affect demand, argues Stephen Brennock at PVM Energy.
In China, the country has been facing its worst epidemic outbreak in recent weeks.
Beijing closed dozens of metro stations on Wednesday and its inhabitants now fear confinement, as in Shanghai, the largest city in China with 25 million inhabitants where most cases are recorded.
China’s pursuit of zero COVID-19 “could limit oil’s upside if lockdowns persist and weaken demand in the world’s second-largest economy,” said Exinity analyst Han Tan.
“Nevertheless, oil should have no trouble staying above the symbolic $100 a barrel mark, as long as demand-side fears are eclipsed by supply-shortage fears,” he argues. -he.