Oil turns higher on looming EU ban on Russian oil

Oil turns higher on looming EU ban on Russian oil

Oil rose on Wednesday, following a 9% drop over the previous two sessions, on supply concerns as the European Union worked on gaining support for a ban on Russian oil and major producers warned they may struggle to fill the gap when demand improves.

Brent crude rose $1.42, or 1.4%, to $103.88 a barrel at 0232 GMT, while U.S. West Texas Intermediate crude climbed $1.23, or 1.2%, to $100.99 a barrel. Both contracts fell more than $1 in early trade.

Oil prices have slumped with commodities and share markets this week, on worries about the hit to economic activity from prolonged COVID curbs in China and sharp interest rate hikes in the United States.

However the supply side still faces challenges.

The EU has proposed to impose an embargo on Russian oil, but a vote, which needs unanimous support, has been delayed as Hungary has dug in its heels in opposition and other European nations have voiced concerns that their economies could suffer.

The impact of the embargo could be limited if the ban is watered down to ease the concerns of eastern European members, but analysts said oil prices could still go higher.

"Even if we do see some of the measures relaxed, it is