WTI eyes $115.00 on falling US SPR, EU focuses on a Russian oil embargo
|- The oil prices have recovered sharply on rising supply worries.
- Falling oil inventories in US SPR have underpinned the oil bulls.
- Oil output from Moscow has plunged 9% post its invasion of Ukraine.
West Texas Intermediate (WTI) futures on NYMEX, has rebounded sharply after testing its crucial support of $110.00 in the New York session. After a mild correction, the oil prices are set to advance further towards the round-level resistance of $115.00.
The strength in the oil bulls is backed by lower oil inventories in the US Strategic Petroleum Reserve (SPR). The US SPR has fallen to 538 million barrels, the lowest since 1987, as per Reuters. Earlier, US President Joe Biden announced the highest release of oil from its US SPR to diminish the supply worries. Meanwhile, oil supply from Moscow has plunged by 9% as per Hellenic Shipping news. Russian oil output has been reported at 9.16 million barrels per day (bpd) in April, a deviation by 860,000 million bpd raises concerns over the supply issues in an already tight oil market.
On Wednesday, the European Union (EU) unveiled a 210 billion euro plan to end its dependence on oil from Russia by 2027 as per Reuters. This has elevated the oil supply worries, which will keep the bullish momentum intact.
On the demand side, China has imposed more restrictive measures to curb the spread of the Covid-19. The Chinese administration is advocating a Work From Home (WFH) policy to contain the spread of the virus and remove curbs on the movement of men, materials, and machines.
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