Oil prices rose on Thursday, recovering from early losses, on hopes that planned easing of restrictions in Shanghai could improve fuel demand while lingering concerns over tight global supplies outweighed fears of slower economic growth.
Brent crude futures for July were up $1.32, or 1.2%, at $110.43 a barrel at 0700 GMT, after falling by more than $1 earlier in the session.
U.S. West Texas Intermediate (WTI) crude futures for June rose 62 cents, or 0.6%, to $110.21 a barrel, recovering from an early loss of more than $2. WTI for July was up $1.33, or 1.2%, at $108.26 a barrel.
Front-month prices for both benchmarks fell about 2.5% on Wednesday.
“A slump in Wall Street soured sentiment in early trade as it underlined concerns over weakening consumption and fuel demand,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
“Still, oil markets are keeping a bullish trend as a pending import ban by the European Union on Russian crude is expected to further tighten global supply,” Yoshida said.
The European Union this month proposed a new package of sanctions against Russia for its invasion of Ukraine. This would include a total ban on oil imports in six months’ time, but the measures have not yet been adopted, with Hungary being among the most vocal critics of the plan.
On Wednesday, the European Commission unveiled a 210 billion euro ($220 billion) plan for Europe to end its reliance on Russian fossil fuels by 2027, and to use the pivot away from Moscow to quicken its transition to green energy.
Also, U.S. crude inventories fell last week, an unexpected drawdown, as refiners ramped up output in response to tight product inventories and near-record exports that have forced U.S. diesel and gasoline prices to record levels.