Oil Extends Gains as Investors Consider Russian Ban and China Outlook, Bloomberg Reports

Oil prices increased for the fourth consecutive session as traders reacted to Germany’s commitment to cease Russian oil imports and evaluated the situation regarding China’s virus-related lockdowns.

In early Asian trading, West Texas Intermediate futures surged above $111 a barrel, marking a third consecutive weekly gain. Government officials in Germany announced plans to halt imports of Russian oil by the year’s end, even if the European Union does not reach a consensus on coordinated measures. In Shanghai, preparations are underway to reopen shops following weeks of stringent Covid-19 restrictions.

The oil market has experienced significant volatility since late February due to Russia’s invasion of Ukraine and the subsequent virus outbreak in China. This conflict has fueled inflation, leading to increased prices for various goods, from food to fuel. In the U.S., gasoline futures have risen to record levels, surpassing $4 a gallon.

On Monday, EU foreign ministers convened in Brussels to discuss the next phase of sanctions against Russia. However, some diplomats have proposed delaying a planned ban on Russian oil imports in light of Hungary’s objections. Meanwhile, officials in Berlin report that negotiations with alternative suppliers are progressing.

As a result of Russia’s invasion, U.S. retail prices for gasoline and diesel have reached all-time highs, tightening the global fuel market. The rising futures prices are expected to reflect quickly at the pump, indicating potential difficulties for drivers as the summer travel season approaches at the end of the month.