Supply fears from pending EU crude ban push oil prices higher
Drop in global oil supply fuels concerns of scarce production, driving prices higher
Oil prices rose on Friday, triggered by global supply concerns due to the Russia-Ukraine war and the looming ban on Russian crude by the EU.
International benchmark Brent crude was trading at $108.80 per barrel at 0624 GMT for a 1.26% increase after closing the previous session at $107.45 a barrel.
American benchmark West Texas Intermediate (WTI) was at $107.22 per barrel at the same time for a 1.03% raise after the previous session closed at $106.13 a barrel.
A proposed EU embargo on Russia could hit 3 million barrels per day of crude oil, Fitch Ratings said in a statement on Thursday.
The global rating agency added that if the EU agrees to an embargo, the market balance will largely depend on OPEC+ policies, particularly its largest producer Saudi Arabia.
This does not elicit relief in global markets, as OPEC+ countries are currently only gradually boosting production and falling short of meeting rising global demand.
Meanwhile, the global oil supply in April saw its biggest monthly loss since February last year, the International Energy Agency (IEA) said in its monthly oil market report on Thursday. Supply decreased by 710,000 barrels per day (bpd) to 98.14 million bpd, as Russia shut in nearly 1 million bpd, the IEA said.
The drop in global supply fuels concerns of scarce production, pushing prices higher.