WTI marches towards $120.00 as the EU summit on the embargo of Russian oil jitters

• Oil prices are boiling ahead of the EU leaders summit.
• An embargo on Russian oil by the EU will elevate the supply worries.
• Slippage in weekly oil stockpiles has spurred the oil prices too.

West Texas Intermediate (WTI), futures on NYMEX, is scaling higher as investors have started raising bets on the embargo of Russian oil ahead of the European Union (EU) leaders summit.

The EU leaders summit on Thursday is going to revolve around the decision of banning Russian oil imports in the eurozone. To retaliate against Russia’s invasion of Ukraine, the EU is planning to drop Russia from its oil importers list. Investors should be aware of the fact that Europe covers its 25% oil demand from Russia only. The statements from the Euro members are parting ways as Germany is notwithstanding the US to ban Russian oil with immediate effect. Gauging oil producers that could substitute Russian oil on very short notice is not practicable. Therefore, the shared currency region should ditch Moscow as an oil supplier gradually.

Adding to that, oil prices are approaching $120.00 amid a significant slippage in the oil stockpiles. The Energy Information Administration (EIA) on Wednesday reported the weekly oil stock at -2.508M, much lower than the market consensus of 0.114M and the previous print of 4.345M. This has underpinned the oil prices.

Meanwhile, the US dollar index (DXY) is also marching towards the north after a hawkish stance from the Fed Open Market Committee (FOMC) members. This has raised the chances of a 50 basis point (bps) interest rate hike from the Federal Reserve (Fed).