2022.05.0419:24:00UTC+00Oil Futures Rise Sharply As EU Ban On Russian Oil Buoy Up Prices

Despite data showing an unexpected increase in U.S. oil stockpiles in the week ended April 29, crude oil prices rose sharply on Wednesday, lifted by the European Union's decision to impose sanctions on Russian oil.

The European Commission has announced several measures including plans to phase out supplies of Russian crude oil within six months and refined products by the end of 2022.

European Commission President Ursula von der Leyen also proposed to remove Russia's biggest bank Sberbank and two other banks from the international SWIFT transaction and messaging system as part of a sixth sanctions package to punish Moscow over its war in Ukraine.

West Texas Intermediate Crude oil futures for June climbed $5.58 or nearly 5.5% to $107.79 a barrel.

Brent crude futures were up $5.50 or 5.23% at $110.47 a barrel a little while ago. Data from Energy Information Administration showed U.S. crude inventories rose by 1.302 million barrels last week, as against expectations for a draw of around 0.830 million barrels.

Gasoline inventories dropped by 2.230 million barrels last week, about a million barrels more than the expected drop, while distillate stockpiles dropped by 2.344 million barrels, compared with expectations for a draw of 0.589 million barrels.

The American Petroleum Institute on Thursday reported that U.S. crude oil inventories fell 3.48 million barrels last week. Distillate inventories dropped 4.46 million barrels and gasoline stocks were down 4.5 million barrels, the report said.

Meanwhile, markets are looking ahead to the meeting of the Organization of the Petroleum Exporting Countries and their allies on Thursday. The group, collectively known as OPEC+, is expected to take a decision with record to monthly production.