• WTI prices appreciate for the second consecutive day to reach an $87.10 high.
• Sanctions on Russian oil and lower reserves are buoying petrol prices.
• China is considering relaxing COVID-19 lockdowns.

WTI futures are trading higher for the second consecutive day on Thursday, to shrug off the last two weeks’ negative trend. The US benchmark oil has extended its recovery from Tuesday’s lows at $82.15 to session highs at $87.10 before retreating to the $86.00 area.

Sanctions on Russia and lower supplies boost oil prices

A European ban on Russian crude oil that will come into effect in December, amid a new set of sanctions for the Ukrainian war, is pushing prices higher as the eurozone leaders struggle to find alternative providers ahead of the winter.

US official data has revealed that the country’s Strategic Petroleum reserves fell last week to their lowest level since 1984. These figures have offset the announcement of US President Joe Biden’s plan to sell 15 million barrels from the strategic reserves to tame crude prices.

Beyond that, the EIA reported a 1.725M decline in crude oil inventories in the week of October 14, against market expectations of a 1.38M increase, which has contributed to push prices higher.

Besides, news that China, the world’s larger importer, is considering shortening the COVID-19 quarantine for visitors has eased market concerns about a decline in demand thus adding bullish pressure on prices.  

Technical levels to watch