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Oil edges higher on Russian supply concerns in volatile trade

Oil settled nearly 1% higher on Thursday, paring earlier gains as the market focused on Russian oil supply concerns, rebounding Chinese demand, and as the Bank of England hiked interest rates less than some had expected.

Brent crude futures settled up 63 cents, or 0.7%, at $90.46 after rising by more than $2 earlier in the session.

U.S. West Texas Intermediate (WTI) crude settled up 55 cents, or 0.7%, at $83.49, after rising by more than $3 earlier in the session.

Russia pushed ahead with its biggest conscription since World War Two, raising concerns an escalation of the war in Ukraine could further hurt supply.

“(Russian President Vladimir) Putin’s bellicose rhetoric is what’s propping up this market,” said John Kilduff, partner at Again Capital LLC in New York.

Supply constraints from the Organization of the Petroleum Exporting Countries (OPEC) added further support, analysts said.

“OPEC crude exports have leveled off from a strong increase at the start of this month,” said Giovanni Staunovo, commodity analyst at UBS.

The European Union is considering an oil price cap, tighter curbs on high-tech exports to Russia and more sanctions against individuals, diplomats said, responding to what the West condemned as an escalation in Moscow’s war in Ukraine.

The European Securities and Markets Authority (ESMA) is also considering a temporary break on energy derivatives as prices have risen following Russia’s invasion of Ukraine in February. (Reuters)

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