Oil extends rally after US bans Russian imports, prompting supply fears

Oil extends rally after US bans Russian imports, prompting supply fears

PHOTO

TOKYO: Oil prices rose on Wednesday as the U.S. ban on Russian oil imports and Britain's plan to phase them out by year end raised concerns of tighter global supply.

Brent crude futures were up $2.17, or 1.7%, at $130.15 a barrel at 0133 GMT, after jumping 3.9% the previous day.

U.S. West Texas Intermediate (WTI) crude futures were up $1.57, or 1.3%, at $125.27 a barrel, after also surging 3.6% on Tuesday.

U.S. President Joe Biden on Tuesday imposed an immediate ban on Russian oil and other energy imports and Britain said it would phase out Russian oil imports through the end of 2022.

Oil prices have surged more than 30% since Russia, the world's second-largest crude exporter, invaded Ukraine. Fears of further disruptions to oil supply amid escalating sanctions on Moscow has boosted buying, analysts said.

"On top of the U.S. and Britain's announcement effects, fears of further disruptions of supply from Russia due to intensifying sanctions on Moscow prompted fresh buying," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

"But Monday's highs will likely become a ceiling for the short term as speculative buying is expected to slow down soon and countries in the northern hemisphere are headed to spring when