Oil bounce back on Wednesday after jumping nearly 10% over the previous two sessions, encouraged by supply concerns as the European Union works on gaining support for a stop on Russian oil and as major manufacturers warned they may suffer to fill the gap when demand increases.
Oil prices have slipped with commodities and share markets this week, on worries about the hit to economic activity from extended Covid limitation in China and sharp interest rate hikes in the U.S. fed. Brent crude was up $2.35, or 2.41%, to $104.84 a barrel, while U.S. West Texas Intermediate crude jumped $2.2, or 2.24%, to $101.97 a barrel.
On other hand, Russia sanctioned 31 companies based in countries that imposed sanctions on Moscow following the Ukraine invasion. That created concern in the market at the same time that Russian natural gas flows to Europe via Ukraine down by a quarter. It was the first time exports via Ukraine have been disrupted since the invasion
Meanwhile, Saudi Arabia and the United Arab Emirates the two of the largest producers in the Organization of Petroleum Exporting Countries have largely refrained from further shipments to Europe, despite their large spare production capacity. To be sure, the U.S. has been the overall top supplier replacing Russian volumes in Europe. And if the European Union proceeds with plans for a full stop on Russian supplies, the African nations may not have much more to give.