-Unfolding sanctions on Russian oil and gas exports are putting extra pressure on prices as supply is getting tighter
Oil prices increased on Tuesday over tight supply fears as demand in China is likely to rebound from COVID restrictions while OPEC+ output levels are thought to fall short of demand.
International benchmark Brent crude was trading at $120.37 per barrel at 0651 GMT for a 0.71% increase after closing the previous session at $119.51 a barrel.
American benchmark West Texas Intermediate (WTI) was at $119.37 per barrel at the same time for a 0.73% gain after the previous session closed at $118.50 a barrel.
Prices increased mainly on the back of fears that the current productions levels would not be enough to meet increasing demand especially in China and in the US.
With easing Covid-19 regulations, hopes for a boost in oil demand in China, the world’s second largest oil consumer, are growing while demand in the US is expected to be higher with the start of the summer driving season on June 1.
Despite rising demand, fears for a weak supply are growing especially after the OPEC+ ministers decided to add 216,000 barrels of oil per day to the market in July and August, lower than what the market is thought to need.
Supply pressure on prices increased with the unfolding sanctions on Russian fossil fuels and surrounding uncertainties amid tight supply fears.