NEW YORK (Pakistan Point News / Sputnik - 29th April, 2022) Crude prices jumped as much as 3% on Thursday on reports that Germany is allegedly ready to ban Russian oil imports, adding to fears about a global squeeze already in place for the commodity.
London-traded Brent and New York-traded West Texas Intermediate (WTI) crude rallied for a third straight day from volatile trading this week that repeatedly took the market below the key support of $100 a barrel.
Brent, global benchmark for oil, settled up $2.27, or 2.2%, at $107.59 a barrel.
WTI, the US crude benchmark, settled up $3.34, or 3.3%, at $105.36 per barrel.
A strong Dollar and a resurgence of COVID-19 cases in China that led to an extended lockdown of its Shanghai financial hubs were among the factors that drove oil lower earlier in the week.
Those bearish elements were ignored on Thursday after The Wall Street Journal reported that Berlin was no longer opposed to an embargo on Russian oil � a dynamic that could further tighten supplies in the already-stressed global energy market.
The Journal article echoed comments from Germany's Economy Minister Robert Habeck on Tuesday, when he said the EU's largest economy could cope with an EU embargo on Russian oil imports and that it was hoping to find ways to replace Russian supplies with others. Prior to the West's sanctions, about 35% of Germany's oil was sourced from Russia.
With OPEC+ due to meet in a week, the oil market could see an extended price recovery from this week's lows, some analysts said.
"The same factors remain at play here and could be the catalyst for an eventual breakout, be it further Chinese lockdowns, slow output growth from OPEC+, new supply disruptions, larger reserve releases etc," Craig Erlam, analyst at online trading platform OANDA, said. "Ultimately, we're continuing to see consolidation in crude markets, with the range tightening and potentially setting us up for a volatile breakout in the coming weeks."
OPEC+, led by the 13-member Saudi-controlled Organization of the Petroleum Exporting Countries and 10 other oil producers steered by Russia, has pushed prices up each time it met over the past year by offering a meager 400,000 barrels per day hike in monthly production � and struggling to fulfill even that.
OPEC officials said their underproduction was due to a lack of investment in oil fields during the COVID-19 breakout of 2020. The global oil alliance will hold its next meeting on May 5.
