Oil prices rose early on Tuesday after the EU managed overnight to reach a compromise deal on banning Russian oil imports, expecting to effectively ban 90% of Russia's oil flows to the bloc by the end of the year.
As of 9:02 a.m. on Tuesday, WTI Crude was up 3.54% from Friday's settlement and was at $119.42. The Brent Crude futures for July, with the contract expiring on Tuesday, were trading up 1.78% at $123.94.
Oil prices are now set for a sixth consecutive months of gains, which is the longest streak of monthly gains in oil prices in more than a decade.
The biggest mover of oil prices on Tuesday was the EU ban - a partial one - but nevertheless, a unanimous decision to start banning Russia's oil exports to the EU. For weeks, Hungary had blocked a decision on an embargo after the European Commission proposed a full ban by the end of the year on all Russian oil imports. The initial proposal was watered down to an agreement on a ban on seaborne imports by the end of the year, with pipeline crude exempted, for now.
The start of the U.S. driving season amid robust demand and multi-year low fuel inventories also supported oil prices. U.S. gasoline prices hit another record of $4.622 per gallon on Tuesday, beating the previous record from just a day earlier, when the national average on Memorial Day was $4.619.
The gradual reopening of Shanghai, a city of 26 million residents in China, also gives the bulls hopes that the worst of the weak Chinese oil demand is over for this year.
While the EU ban is set to further tighten global oil supply, the OPEC+ group, which meets on Thursday, June 2, is not expected to change its production plan which calls for only moderate monthly increases in output.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More