Petroleum prices spiked on Wednesday as the European Union, the world’s largest trading bloc, spelled out plans to phase out imports of Russian oil, offsetting demand worries in top importer China.
Brent crude futures rose $3.73, or 3.5%, to $108.70 U.S. a barrel amid thin trading volume, with China and Japan closed for holidays. West Texas Intermediate crude futures rose $3.76, or 3.7%, to $106.17 a barrel.
European Commission President Ursula von der Leyen on Wednesday proposed the phased oil embargo on Russia over its war in Ukraine, as well as sanctioning Russia’s top bank, in a bid to deepen Moscow’s isolation.
The commission’s measures include phasing out supplies of Russian crude within six months and refined products by end-2022, von der Leyen said. She also pledged to minimize the impact on European economies.
Investors are also waiting for an announcement from the U.S. Federal Reserve on Wednesday. It is expected to intensify efforts to bring down high inflation by raising interest rates and reducing its balance sheet.
In the United States, crude and fuel stocks fell last week, according to market sources citing American Petroleum Institute figures. Crude stocks fell by 3.5 million barrels for the week ended April 29, they said. This was more than an expected 800,000-barrel drop estimated in a Reuters poll.
U.S. government data on stocks is due on Wednesday.
