Oil prices jumped on Wednesday as the European Union - the world's largest trading bloc - announced plans to phase out Russian oil imports, offsetting fears of falling demand from China, the world's largest oil importer.
By 07:46 GMT, Brent crude futures rose $2.94 a barrel, or 2.8 percent, to $107.91 a barrel, amid trading in small quantities due to the holiday in China and Japan.
US West Texas Intermediate crude futures also rose $3.02, or 3%, to $105.43 a barrel.
European Commission President Ursula von der Leyen on Wednesday proposed a gradual embargo on Russian oil due to the war on Ukraine, in addition to imposing sanctions on Russia's largest bank to further isolate Moscow.
The measures proposed by the President of the European Commission included the dispensation within 6 months of Russian crude and refined products by the end of 2022. Von der Leyen pledged to reduce the impact on European economies.
According to market sources, citing data from the American Petroleum Institute, US crude and fuel stocks fell last week.
The sources said that crude stocks fell by 3.5 million barrels in the week ending April 29.
That was more than expected in a Reuters poll, which estimated the drop would be 800,000 barrels.
The US government will release inventory data on Wednesday.
In the previous session, oil prices fell more than 2%, due to concerns related to demand due to the prolonged closure measures in China to combat Covid-19, which curtailed travel plans during the May Day holiday.
OPEC.. High surplus in 2022
Meanwhile, a report seen by Reuters showed today, Wednesday, that the OPEC Plus alliance expects a surplus of 1.9 million barrels per day in 2022, an increase of 600,000 barrels per day from previous estimates, amid expectations of a slowdown in oil demand growth this year.
The report - which was prepared before the meeting of the OPEC Plus Joint Technical Committee to be held today, Wednesday - also expected that oil stocks in the Organization for Economic Cooperation and Development during the last quarter would slightly exceed the average in 2015-2019.