WTI consolidates around $108.00 as EU looks to embargo Russian oil

• WTI hovers around $108 ahead of the EU summit outcome on the embargo of Russian oil.
• Germany has denied withstanding the Russian oil ban due to higher dependency.
• Investors will focus on oil stockpiles reports from the EIA.

West Texas Intermediate (WTI), futures on NYMEX, is oscillating in a narrow range of $107.20-111.74 after sensing a minor correction near $113.00 on Tuesday. The oil prices are likely to trade directionless on the mixed response from the European Union (EU) players on the embargo of Russian oil. Nations in the European domain part ways with some countries like Germany, which clearly stated that withstanding the US in retaliation for Russia’s invasion of Ukraine, would cause some serious dents on their economy.

Europe has a significant dependency on Russian oil and energy. More than a quarter of Europe‘s oil consumption is derived from Russia and an embargo on Russian oil in times when the Eurozone is going through supply chain bottlenecks and galloping oil prices won’t be a better option.

On the supply side, damage in the Caspian Pipeline Consortium (CPC) may reduce the oil exports by around one million barrels per day (bps). However, its impact is yet not reflected in the oil prices.

Meanwhile, the American Petroleum Institute (API) has reported a slippage in oil stockpiles on Tuesday. The oil stockpiles landed at -4.28M, much lower than the previous print of 3.754. On Wednesday, the oil stockpiles report from the Energy Information Administration (EIA) will remain in focus.

On the dollar front, the US dollar index (DXY) has slipped near 98.40 on easing the risk-aversion theme. The speech from the Federal Reserve (Fed) Chair Jerome Powell will be the major event to be watched on Wednesday.