Oil erased some losses in volatile trading on Wednesday, with WTI crude trading above $101 per barrel after the EIA report showed a smaller than expected rise in US crude inventories, while investors balance supply and demand concerns over Russian oil and gas disruption and a worsening global economic outlook. Russia cut natural gas supply to Poland and Bulgaria amid a standoff over fuel payments, escalating an energy crisis at a time the EU is considering a ban on Russian crude imports.
Last week, the European Commission said EU companies may be able to work around Russia’s demand without breaching sanctions. The market has been gripped by heightened volatility since Russia’s invasion of Ukraine in late February, with the US and UK imposing a ban on Russian oil imports, while the EU struggled for consensus on similar measures. Meanwhile, the Covid situation in China continued to weigh on the markets amid fears that Beijing may join Shanghai into lockdowns, clouding the outlook demand.