Crude Oil Rises 6% After Ukraine Closes Gas Pipeline to Europe

Crude oil futures rose on Wednesday (May 11) following reports that gas supplies from Russia to Europe via Ukraine have declined as Ukraine closed its main transport routes.

  • WTI crude futures rose $5.95, or 6%, at $105.71 a barrel.
  • BRENT crude futures were up $5.05, or 4.9%, at $107.51 a barrel.

Crude oil futures are rising following reports that Ukraine has closed the main routes for transporting gas to Europe, citing Russian military intervention as the reason. As a result, Russian gas supplies to Europe fell by about a quarter yesterday. This was the first time that gas supplies have been interrupted since the Russian military invaded Ukraine.

In the past, Ukraine remained an important transport route for gas from Russia to Europe. The route, which Ukraine has ordered to be closed this time, normally transports 8% of Russian gas from Russia to Europe, mainly to Austria, Italy, Slovakia and other Eastern European countries.

Crude oil futures were also boosted by forecasts that the world oil market will face further tightening if the European Union (EU) imposes sanctions on oil from Russia.

According to the EIA, U.S. crude oil inventories rose by 8.5 million barrels last week.

Gasoline inventories declined by 3.6 million barrels, and distillate inventories, including heating oil and diesel, fell by 900,000 barrels.

The Spot Market is Open

Thursday, May 12, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.45

104.44

-1.27

-1.20%

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