Oil Down, European Union Set to Ban Russian Crude By

© Reuters.

By Gina Lee

– Oil was down on Tuesday morning in Asia, extending its gains from the previous session. The European Union moved ahead with its plans to tighten sanctions on Russia as the week began, with Germany saying it was prepared to back an immediate embargo on Russian oil.

Germany is Russia’s biggest energy customer, and the stance could rob Moscow of a large revenue stream within days.

Brent oil futures edged down 0.19% to $107.38 by 1:12 PM ET (5:12 AM GMT) and WTI futures edged down 0.19% to $104.97.

"Crude prices are up after comments from Germany's economy minister, which noted that the EU plans to ban Russian oil imports either immediately or in a few months," SPI Asset Management managing partner Stephen Innes told Reuters.

The European Commission is expected to finalize work on a sixth package of European Union (EU) sanctions against Russia later in the day. The sanctions, the latest in response to Russia’s invasion of Ukraine on Feb. 24, will include a ban on buying Russian oil. However, the embargo may spare Hungary and Slovakia, both of which are heavily dependent on Russian crude, two EU officials said on Monday.

A tight market drove fuel demand up, in turn boosting both the Brent and WTI benchmarks by more than 40 cents on Monday after a volatile session.

Record exports from the U.S. Gulf are eating into supplies to the domestic U.S. market, ANZ Research analysts said in a note.

At least 2 million barrels per day of gasoline, diesel, and jet fuel flowed out of refineries in the U.S. Gulf in April 2022 according to Vortexa Analytics, and as a result, the diesel crack spread widened to $73.50 a barrel, the highest since 1986, the note added.

Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

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