(Bloomberg) -- Oil eased as investors weighed threats to supplies amid the war in Ukraine, with President Joe Biden set to address the crisis on a trip to Brussels that may see moves to curb reliance on Russian energy.
West Texas Intermediate edged lower in early Asian trading. May futures rose more than 5% on Wednesday after U.S. stockpiles fell and a Black Sea export terminal halted loadings following bad weather. The Biden administration and European Union are close to a deal aimed at slashing the region’s dependence on Russian energy, although that drive may focus primarily on natural gas.
In Asia, meanwhile, China’s worst coronavirus outbreak since the start of the pandemic has led to some refiners cutting back operations, with analysts rethinking their demand estimates as strict lockdowns curb consumption.
Oil has rallied more than 50% this year, hitting the highest level since 2008 earlier this month, as Russia’s invasion of Ukraine threw global commodity markets into turmoil. While the U.S. and U.K. have already moved to bar flows of Russian crude, there’s greater reluctance among EU members to follow suit given the region’s dependence. Trafigura Group forecast this week that crude prices are set to go on rising, potentially hitting $150 a barrel.
Oil markets remain strongly backwardated, a bullish pattern marked by near-term prices trading above longer-dated ones. Brent’s prompt spread -- the difference between its two nearest contracts -- was $3.85 a barrel on Wednesday, up from 41 cents at the start of the year.
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