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Market News International oil prices rose weakly, EU must meet Hungary's two demands before new sanctions on Russia

International oil prices rose weakly, EU must meet Hungary's two demands before new sanctions on Russia

On Thursday (May 26), international oil prices maintained a weak upward pattern, and the global supply and demand situation was tense. The upcoming peak driving season in the United States will further push up oil prices. But a dispute between the European Union and member Hungary over a planned embargo on Russian oil imports has limited gains in oil prices. Hungary is seeking investment of about 750 million euros ($800 million) to upgrade its refineries and expand a pipeline from Croatia to enable it to wean itself off Russian oil.

2022-05-26
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On Thursday (May 26), international oil prices maintained a weak upward pattern, and the global supply and demand situation was tense, but the European Union and member state Hungary had a dispute over Russia's oil import embargo plan, limiting oil price gains.

At 16:47 GMT+8, NYMEX crude oil futures rose 0.58% to $110.97 a barrel; ICE Brent crude futures rose 0.47% to $114.57 a barrel.


U.S. crude stockpiles fell more than expected in the week to May 20 as exports surged, boosting markets, data from the U.S. Energy Information Administration (EIA) showed overnight. Analysts said lower U.S. inventories and an imminent European Union embargo on Russian oil imports are pushing up prices.

The upcoming U.S. driving season will further push up oil prices. "The annual U.S. driving season kicks off Memorial Day weekend, which is likely to stimulate oil demand, with further gains in oil prices ahead," said Sugandha Sachdeva, vice president of commodities research at Religare Broking.

European Council President Michel said on Wednesday (May 25) that he was confident of a deal before the meeting on May 30. But Hungary remains a stumbling block for EU sanctions against Russia. Judit Varga, Hungary's justice minister, previously said: "First comes the solution, then comes the sanctions."

Hungary is seeking investment of about 750 million euros ($800 million) to upgrade its refineries and expand a pipeline from Croatia to enable it to wean itself off Russian oil. Croatia backed this, saying it was ready to upgrade its LNG terminal on Krk Island.

The European Commission last week provided up to 2 billion euros to support countries that are landlocked and dependent on Russian supplies - Hungary, the Czech Republic and Slovakia. They also received longer sanctions waivers. The European Commission also proposed a 210 billion-euro plan to end Europe's reliance on Russian fossil fuels by 2027, but did not say how the money would be distributed among EU countries.

But even without a formal ban, Russian oil exports are now much smaller than theoretical, with deliveries to the Netherlands and France almost entirely halted, as buyers and trading firms actively avoid dealing with Russian crude and fuel suppliers.

Stephen Innes, managing partner at SPI Asset Management, said in a report: "The focus of the oil market is the EU summit next week, when countries will try again to agree on an EU-wide embargo on Russian oil imports."
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