Oil Stabilizes After Volatile Trading, U.S. Considers Export Ban – Reuters

By Stephanie Kelly

NEW YORK (Reuters) – Oil prices stabilized on Tuesday following volatile trading as concerns over tight supply outweighed worries about a potential recession and COVID-19 restrictions in China.

Prices dipped after U.S. Energy Secretary Jennifer Granholm indicated that President Joe Biden had not dismissed the possibility of implementing export restrictions to tackle rising domestic fuel prices. "Initially, the assumption is that this will lower product prices in the United States," remarked Phil Flynn, an analyst at Price Futures Group.

Brent crude increased by 14 cents to close at $113.56 per barrel, while U.S. West Texas Intermediate (WTI) crude fell by 52 cents, settling at $109.77 per barrel.

Oil prices have surged this year, with Brent reaching $139 in March, the highest level since 2008, largely due to supply concerns exacerbated by Russia’s invasion of Ukraine.

Market support earlier in the day came as the European Union moved closer to finalizing a ban on Russian oil imports. Germany’s economy minister noted that such an embargo could be agreed upon "within days."

Travel is anticipated to be at its highest level in two years during the upcoming U.S. Memorial Day weekend, as more motorists are expected to travel despite high fuel prices in the aftermath of COVID-19 lockdowns.

According to sources citing data from the American Petroleum Institute, U.S. crude stocks rose by 567,000 barrels last week. In contrast, gasoline inventories experienced a decline of 4.2 million barrels, while distillate stocks decreased by 949,000 barrels.

An extended Reuters poll indicated that U.S. crude oil and gasoline inventories likely fell last week, while distillate stockpiles were expected to increase, with government data set to be released on Wednesday.

However, concerns regarding global economic stability—highlighted at this week’s Davos meeting—also contributed to fears about oil demand, putting additional pressure on prices.

Meanwhile, Beijing is intensifying its quarantine measures to control its COVID-19 outbreak, and the lockdown in Shanghai is expected to be lifted in just over a week.