Oil rises 5% on fresh US sanctions against Russia

Group 1: Oil Price Movements - Oil prices increased by 5% following U.S. sanctions on major Russian suppliers Rosneft and Lukoil, with Brent crude futures rising to $65.98 per barrel and U.S. West Texas Intermediate crude futures reaching $61.81 [1][2] - Prompt Brent crude futures shifted to backwardation, with the first-month contract trading $1.98 above the six-month delivery contract [3] Group 2: Impact of Sanctions - The U.S. sanctions will compel refineries in China and India, significant buyers of Russian oil, to find alternative suppliers to avoid exclusion from the Western banking system [2] - Indian refiners are expected to significantly reduce imports of Russian oil due to the new sanctions, with Reliance Industries planning to cut or halt such imports entirely [4] Group 3: Market Sentiment and Supply Concerns - There is skepticism regarding the effectiveness of U.S. sanctions in fundamentally altering supply and demand dynamics, as previous sanctions have not significantly impacted Russian oil production or revenues [5] - Oversupply concerns from OPEC+ production increases are limiting crude price gains, with UBS projecting Brent prices to remain between $60 and $70 [5] Group 4: Demand Dynamics - U.S. crude oil, gasoline, and distillate inventories decreased last week, indicating strengthened refining activity and demand [6]