Oil rises, defying stock market falls as supply issues persist

Workers walk as oil pumps are seen in the background at the Uzen oil and gas field in the Mangistau region of Kazakhstan November 13, 2021. REUTERS/Pavel Mikheyev

May 6 (Reuters) – Oil prices climbed for a third consecutive session on Friday, brushing aside concerns over global economic growth as worries over tight supply supported prices ahead of an impending European Union embargo on Russian oil.

Brent crude futures rose 88 cents, or 0.8%, to $111.78 a barrel at 0641 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 84 cents, or 0, 8%, to $109.10 a barrel.

Brent and WTI are on track to rise for a second consecutive week, supported by the EU’s proposal to phase out supplies of Russian crude oil in six months and refined products by the end of 2022 This would also prohibit all shipping and insurance services. for the transport of Russian oil. The plan still requires the unanimous backing of all 27 countries in the bloc. Read more

“There are concerns about global growth and what it could mean for oil demand,” said Warren Patterson, who heads ING’s commodities research.

“However, the impending EU ban on Russian oil more than offsets this at the moment, and should therefore limit the price decline.”

Shares on Wall Street fell on Thursday as investors feared aggressive central bank policies around the world aimed at taming inflation could hurt growth. Read more

The Bank of England warned on Thursday that Britain risked a double whammy of a recession and double-digit inflation as it hiked interest rates to their highest since 2009, rising by a quarter of a percentage point to 1%. Read more

On the supply side, the Organization of the Petroleum Exporting Countries, Russia and allied producers, known as OPEC+, agreed to another modest monthly increase in oil production as expected. Read more

Ignoring calls from Western countries to increase production further, OPEC+ agreed to increase June production by 432,000 barrels per day, in line with its plan to lift restrictions imposed when the pandemic hammered demand.

Investors are also eyeing a surge in demand from the United States this fall as Washington unveiled plans to buy 60 million barrels of crude for its emergency stockpiles. Read more

A US Senate panel has introduced a bill that could expose OPEC+ to lawsuits for collusion over rising oil prices. Congress has failed to pass versions of the legislation for more than two decades, but lawmakers are concerned about rising inflation and high gasoline prices. Read more

Reporting by Florence Tan in Singapore and Laura Sanicola in New York; Editing by Richard Pullin

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