Oil prices jump as OPEC warns of supply risks

OPEC Secretary-General Mohammad Barkindo says prices as being driven not by fundamentals but primarily by political factors at present

New York, U.S. | Xinhua | Oil prices surged on Tuesday after the Organization of the Petroleum Exporting Countries (OPEC) warned of severe supply risks if Russian oil is fully banned.

The West Texas Intermediate (WTI) for May delivery added 6.31 U.S. dollars, or 6.7 percent, to settle at 100.60 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for June delivery increased 6.16 dollars, or 6.3 percent, to close at 104.64 dollars a barrel on the London ICE Futures Exchange.

OPEC Secretary-General Mohammad Barkindo warned on Monday at a meeting between European Union (EU) representatives and OPEC that it would not be able to offset an outage of up to 7 million barrels per day in the event of an embargo on Russian oil.

Furthermore, he sees prices as being driven not by fundamentals but primarily by political factors at present.

The EU remains divided on a ban on Russian crude oil imports, but some foreign ministers said the option is not off the table.

Meanwhile, traders are awaiting data on U.S. crude stockpiles as the U.S. Energy Information Administration is set to release its weekly petroleum status report on Wednesday. Analysts surveyed by S&P Global Platts forecast the U.S. crude inventories to show a climb of 300,000 barrels for the week ending April 8.

On Monday, oil prices settled noticeably lower, which saw the U.S. crude benchmark and Brent dip 4 percent and 4.2 percent, respectively, amid demand worries.

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Xinhua