Oil prices rise as European Union prepares to ban Russian crude

Oil prices gained on Tuesday, extending previous session gains, as the European Union firmed up plans to increase sanctions on Russia this week, with Germany stating it was willing to support an immediate ban on Russian oil.

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Brent crude prices jumped 25 cents, or 0.2%, to $107.83 a barrel, while WTI crude futures in the United States advanced 17 cents, or 0.2%, to $105.34 a barrel.

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The European Commission, according to Reuters, is scheduled to complete work on the sixth package of European Union (EU) sanctions against Russia for its actions in Ukraine on Tuesday, which would include a ban on purchasing Russian oil.

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The ban may exempt Hungary and Slovakia, both of which rely substantially on Russian crude, reported Reuters citing sources.

Tight fuel product supplies are increasing demand for crude, which helped lift Brent and WTI by more than 40 cents following a tumultuous day on Monday.

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ANZ Research analysts told Reuters that record exports from the United States Gulf are depleting supply to the domestic market. According to the cargo tracking service Vortexa Analytics, at least 2 million barrels per day of gasoline, diesel, and jet fuel moved out of refineries in the United States Gulf in April.

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As a result, ANZ said that the diesel crack spread, or the margin on refining a barrel of oil into fuel products, had increased to $73.50 a barrel, the highest level since 1986.

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Traders will be paying particular attention to inventory data from the United States, with the American Petroleum Institute industry group reporting stocks for the week ending April 29 on Tuesday, followed by official data from the Energy Information Administration on Wednesday.