Oil Extends Gains as Investors Weigh Russian Ban, China Outlook

Ben Sharples, Bloomberg News

An oil pump jack in Midland, Texas, US, on Thursday, April 7, 2022. Midland, Texas, is used to booms and busts. But even here, prices are shocking the local economy — and the Fed may not be able to help. , Bloomberg

(Bloomberg) -- Oil rose for a fourth session as traders weighed Germany’s pledge to ban Russian imports and the outlook for China’s virus lockdowns.

West Texas Intermediate futures climbed above $111 a barrel in early Asian trading after a third weekly gain. Germany plans to stop Russian oil imports by the end of the year even if the European Union fails to agree on co-ordinated action, according to government officials. Shanghai is preparing to reopen shops following weeks of strict Covid-19 restrictions.

The oil market has been gripped by a tumultuous period of trading since late February following Russia’s invasion of Ukraine and China’s virus outbreak. The war has fanned inflation, driving up the cost of everything from food to fuels. US gasoline futures extended gains Monday to a record above $4 a gallon.

EU foreign ministers meet in Brussels on Monday to discuss the next round of Russian sanctions and diplomats have floated the idea of delaying a proposed ban on its oil imports following objections from Hungary. Efforts to seal deals with alternative suppliers are progressing at the chancellery in Berlin, said the officials who spoke on condition of anonymity.

US retail gasoline and diesel prices have already surged to records as Russia’s invasion led to a tightening in the global fuels market. Rising futures tend to trickle through to the pump quickly, signaling more pain for drivers ahead of the start of the summer driving season at the end of this month.