EU Commission Finalizing Russian Embargo Package
May 3, 2022
Two EU officials said the European Union Commission may spare Hungary and Slovakia from an embargo on buying Russian oil, now under preparation. The Commission is expected to finish the deal today and work on the next sanction package against Russia for their actions in Ukraine.
China’s factory activity contracted at a steeper pace in April as widespread COVID-19 lockdowns halted industrial production and disrupted supply chains, raising fears of a sharp economic slowdown in the second quarter that will weigh on global growth.
The talks about the potential oil embargo just added to the supply concerns and helped fuel the rally in energy being driven mainly by front-month ULSD. An embargo will bring more buyers to the US, and it appears some of the craziness in the ULSD spreads has been the result of traders knowing that more demand is coming.
OPEC+ meets Thursday, May 5, and is expected to stick to their oil output agreement and add 420,000 BPD of oil output in April. However, they have had difficulty raising oil supplies.