WTI stabilizes above $100.00 on the absence of Russian oil substitutes in a tight market

• WTI has climbed near $106.00 as the EU will discuss an embargo on Russian oil in meeting with Biden.
• IEA is expecting a three-million bpd drop in supply against a one-million bpd drop in demand.
• The market has shrugged-off optimism over the additional oil pumping from the OPEC cartel.

West Texas Intermediate (WTI), futures on NYMEX, has witnessed an intense buying interest after hitting a low of $92.37 on Tuesday. The black gold is surging swiftly after the International Energy Agency (IEA) raises concerns over the supply bottlenecks due to sanctions imposed on Russia by the Western leaders.

The IEA said three million barrels per day (bpd) of Russian oil and products could be shut in from next month. That loss would be far greater than an expected drop in demand of one million bpd from higher fuel prices. The statement from the IEA has pushed the oil prices higher after an almost 25% fall from its recent highs at $126.51 on March 8.

The market participants have shrugged off the optimism from the OPEC cartel on pumping more oil into the global supply to support the demand-supply imbalance. The OPEC has promised to utilize their spare capacity to produce more oil that may fix the shortage of oil going forward.

Meanwhile, the US has sent Patriot Missiles to Saudi Arabia after an urgent request to fend-off drone and missile attacks by the Iran-backed Houthi rebels in neighboring Yemen as per Wall Street Journal. This may pose uncertainty to the potential Iran nuclear deal going forward and investors may underpin oil further.

Moreover, the European Union has announced that it will consider an embargo on Russian oil against its invasion of Ukraine. The EU community will discuss the sanction in meeting with US President Joe Biden this Thursday, as per Reuters. Should this occur, a fresh impulsive wave will be witnessed in the oil prices.

On the dollar front, the US dollar index (DXY) is trading in a range of 98.13-98.34. Investors are eyeing the Federal Reserve (Fed)’s Chair Jerome Powell's speech, which is due on Wednesday.