Choose country & language:

Oil prices are supported by expectations of an EU ban on Russian oil

Home >  Daily Market Digest >  Oil prices are supported by expectations of an EU ban on Russian oil

Written by:
Myrsini Giannouli

06 May 2022
Share the article

Oil prices remained strong on Thursday, with WTI trading above $110 per barrel. If the WTI price drops, support can be found at the $94.5 per barrel level and further down at the $90 per barrel level, while resistance can be found near $118.3 per barrel. 

Oil prices are especially volatile, as competing factors affect oil supply and demand. Stalling global economic growth and lockdowns in China dampen demand. Covid restrictions in China have raised fears of a large decrease in global oil demands. China is the largest importer of crude oil and the strict Covid lockdowns had been reducing global oil demand. The large economic hub in Shanghai has been in a zero-Covid lockdown for weeks now. China’s capital city of Beijing is not under zero-Covid lockdown yet, but has strict Covid restrictions in place, limiting oil demand.

The crisis between Russia and Ukraine however, has been intensifying concerns of disruptions in oil distribution, supporting oil prices. The US has already banned all oil and gas imports from Russia, with as many as 3 million barrels per day of Russian crude oil potentially removed from the market as a result of sanctions and of boycotting of Russian oil. 

The EU has been so far hesitant to enforce an embargo on Russian oil, as many of its member states, and especially Germany, depend heavily on Russian oil imports. On Thursday however, a new package of Russian sanctions was outlined by the EU. The new sanctions include a severe ban on Russian oil crude imports. Even though the ban, if enforced, will likely throw the Eurozone into an energy crisis, the ban will not take effect for another six months. The EU is hesitant to cut off Russian oil imports abruptly, as most EU member states are in favor of gradually weaning off Russian oil imports. Expectations of an EU ban propped up oil prices on Thursday, although the effect of the new EU sanctions was moderated since their enforcement would not be immediate.

On Thursday, OPEC+ decided to raise its production output by a modest 432,000 barrels per day for next month. OPEC members responded to the plans of an EU ban on Russian oil by raising their production targets. OPEC’s announcement halted the rally of oil prices a little on Thursday, alleviating global oil demand a little.

WTI 1hr chart


The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article:

Latest news

Yen weakness increases intervention risks

Myrsini Giannouli 29 September 2023

Gold dips on hawkish Fed speak

Myrsini Giannouli 29 September 2023

Oil price rally halted on interest rate concerns

Myrsini Giannouli 29 September 2023

Crypto markets bullish on hopes of Ethereum ETF

Myrsini Giannouli 29 September 2023
Why TopFX
13+ years

industry presence
as a Liquidity Provider

from 0.0 pips

and reliable execution


client funds


customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!