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Brent crude was up $1.30, or 1.1%, at $116.90 a barrel by 1149
GMT. U.S. West Texas Intermediate (WTI) crude rose $1.05, or
0.9%, to $115.72.
Both benchmarks registered gains over May, marking the sixth
straight month of rising prices.
"The mood on the oil market is seemingly turning ever more
bullish," said Julius Baer analyst Norbert Rucker. "Europe's
embargo and China's partial reopening is fuelling supply fears
and lifting oil prices."
EU leaders agreed in principle on Monday to cut 90% of oil
imports from Russia by the end of this year, the bloc's toughest
sanctions yet since the start of the invasion of Ukraine, which
Moscow calls a "special military operation".
Once fully adopted, sanctions on crude will be phased in over
six months and on refined products over eight months. The
embargo exempts pipeline oil from Russia as a concession to
Hungary and two other landlocked Central European states.
"We maintain our view that, given time, Russia will be able to
redirect most of its exports and peg maximum impact on Russian
production at 1.5 million barrels per day," JP Morgan said in a
note on Wednesday.
Sources told Reuters that Russian oil companies led by Rosneft
this month plan to re-open wells that they had shut owing to
Western sanctions.
In China, Shanghai's strict COVID-19 lockdown ended on Wednesday
after two months, prompting expectations of firmer fuel demand
from the country.
Capping gains were reports that some producers were exploring
the idea of suspending Russia's participation in a an OPEC+
production deal on expectations such a move would increase
supply.
OPEC+ comprises members of the Organization of the Petroleum
Exporting Countries and their allies. The group is due to meet
on Thursday to set policy.
While there was no formal push for OPEC countries to pump more
oil to offset any potential Russian shortfall, some Gulf members
had begun planning an output increase sometime in the next few
months, the Wall Street Journal reported, citing OPEC delegates.
U.S. crude oil production rose in March by more than 3% to its
highest since November, a U.S. Energy Information Administration
report showed on Tuesday.
Analysts polled by Reuters expected U.S. crude oil inventories
to have fallen last week while gasoline and distillate
stockpiles were expected to have increased. Official government
data is expected on Thursday. [EIA/S]
(Reporting by Ahmad GhaddarAdditional reporting by Isabel Kua in
SingaporeEditing by David Goodman)
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