Oil gains ground after data show fall in US stocks

Oil prices rose on Wednesday as a reported drop in US crude inventories increased the concern about tight global supply amid the hit to Russian exports from economic sanctions.

Brent crude futures climbed $ 1.77, or 1.53percent, to $ 117.25 a barrel at 4.43am GMT, after falling 14 cents in the previous session.

US West Texas Intermediate ( WTI) crude futures rose $ 1.51, or 1.38percent, to $ 110.78 a barrel, after losing 36c on Tuesday. The market remains on edge over the prospect of further sanctions on Russia, the world’s secondlargest crude exporter, after its invasion of Ukraine, actions that Moscow calls a “special operation”.

Prices dipped on Tuesday as the EU seems unlikely to agree to a ban on Russian oil. However, US President Joe Biden is set to announce more sanctions on Russia when he meets with European leaders on Thursday in Brussels, including an emergency meeting of Nato. “We expect continued high volatility through the rest of the week, and especially around Thursday’s Nato summit,” said Vandana Hari, founder of oil market analysis provider Vanda Insights. Hari added that there may be some relief for the market if the EU drops the idea of a ban on Russian oil imports. “But supply worries will remain elevated as long as the Russia- Ukraine peace talks remain deadlocked,” she said. The latest data from the American Petroleum Institute industry group showed crude stocks in the US, the world’s biggest oil consumer, fell by 4.3- million barrels for the week ended March 18, according to market sources, counter to analysts’ forecasts for an increase.