Oil climbs on tight supply, prospect of EU ban on Russian supply

LONDON, May 26 (Reuters) – Oil prices rose on Thursday, extending a cautious rally this week on signs of tight supply while the European Union (EU) wrangles with Hungary over plans to ban imports from Russia, the world’s second-largest crude exporter, after it invaded Ukraine.

Brent crude futures gained 87 cents, or 0.8%, to $114.90 a barrel at 1001 GMT. U.S. West Texas Intermediate (WTI) crude futures climbed $1.02, or 0.9%, to $111.35 a barrel.

A bigger-than-expected drawdown in U.S. crude inventories in the week to May 20, following soaring exports, buoyed the market on Wednesday. U.S. refiners picked up the pace of activity, boosting overall capacity use to the highest levels since before the pandemic.

“The fundamental backdrop … is getting price supportive as the driving season is approaching and will turn even more bullish once the EU sanctions on Russian oil sales are endorsed by all parties involved,” PVM Oil’s Tamas Varga said.

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