Daily Times

Crude oil prices surged on Tuesday after reports emerged that coronavirus cases in China are declining while the European Union’s diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil.

As of 1205 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $1.21 (+1.06 percent) to reach $115.45 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, increased to $115.28 a barrel, up by $1.08 (+0.95 percent).

The price for Opec basket was recorded at $113.07 a barrel with an increase of 0.62 percent. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.

Arab Light was available at $112.06 a barrel with an increase of 3.47 percent and the price of Russian Sokol jumped to $101.72 a barrel with a 3.56 percent gain.

Shanghai aims to reopen broadly and allow normal life to resume for the city’s 25 million people from June 1, a city official said on Monday, after declaring that 15 of its 16 districts had eliminated cases outside quarantine areas. However, it is estimated that 46 cities in China are under lockdowns, hitting shopping, factory output and energy usage.

Oil prices also found some support as the European Union’s diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil despite concerns about supply in eastern Europe. However, EU foreign ministers failed on Monday in their effort to pressure Hungary to lift its veto of the proposed oil embargo, with Lithuania saying the bloc was being held hostage by one member state.

Oil surged in 2022 as Russia’s Ukraine invasion added to supply concerns, with Brent reaching $139, the highest since 2008, in March. Worries about growth from China’s Covid curbs and U.S. interest rate hikes have prompted this week’s slump. A backdrop of tight supply because of what major producers say is partly a result of inadequate investment remains supportive for oil.