Oil rises as supply concerns persist

Oil prices rose for the third consecutive session on Friday, shrugging off concerns about global economic growth as looming European Union sanctions on Russian oil raised the possibility of a supply shortage.

Brent crude futures rose $2.08, or 1.88%, to $112.98 a barrel by 0922 GMT, while US West Texas Intermediate crude futures jumped $2, or 1.85%, to $110.26 a barrel.

The two crudes are on track to register a rise for the second week in a row, supported by the European Union’s proposal to phase out supplies of Russian crude oil within six months and refined products by the end of 2022. It also bans all shipping and insurance services for transporting Russian oil.

Three European Union sources told Reuters on Friday that the bloc is adjusting its sanctions plan in an attempt to win the support of opposing countries.

Ignoring calls from Western countries to increase production, the OPEC + group, which includes the Organization of the Petroleum Exporting Countries (OPEC), Russia and allied producers, adhered to its plan to increase production target in June by 432,000 barrels per day.

However, analysts expect the group’s actual production rise to be much lower due to capacity constraints.

Investors are also looking to boost demand from the United States in the fall as Washington revealed plans to buy 60 million barrels of crude oil for emergency stocks.

Concerns about demand due to signs of a weak global economy have curbed price hikes.

The Bank of England warned on Thursday that Britain risked a double whammy of recession and inflation of more than 10 percent. It raised interest rates by a quarter of a percentage point to 1 percent, their highest level since 2009.

Strict anti-Covid-19 restrictions in China caused negative effects in the second quarter for the world’s second largest economy.