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NEW YORK: Oil prices rose about 3% on Friday as US gasoline prices jumped to an all-time high and on fears supplies would tighten further if the European Union bans Russian oil after Moscow this week sanctioned European units of state-owned Gazprom.

Earlier this week, oil prices were kept in check by worries about inflation, a strong US dollar and slower global growth due to China’s COVID-19 lockdowns and Russia’s invasion of Ukraine.

Brent futures rose $3.33, or 3.1%, to $110.78 a barrel by 11:10 a.m. EDT (1510 GMT). US West Texas Intermediate (WTI) crude rose $3.66, or 3.5%, to $109.79.

WTI was on track for its highest close since March 25 and its third weekly rise. Brent remained on track for its first weekly decline in three weeks.

Oil prices have been volatile, supported by worries an EU ban on Russian oil could tighten supplies but pressured by fears that a resurgent pandemic or other factors could cut global demand. “An EU embargo, if fully enacted, could take about 3 million bpd (barrels per day) of Russian oil offline, which will completely disrupt, and ultimately shift global trade flows, triggering market panic and extreme price volatility,” said Rystad Energy analyst Louise Dickson. “As of 15 May 2022, unless ‘strictly necessary’ for EU energy consumption security, traders in the EU are set to cease their purchases of state-owned Russian oil,” Dickson said.

This week, Moscow slapped sanctions on the owner of the Polish part of the Yamal natural gas pipeline that carries Russian gas to Europe, as well as the former German unit of the Russian gas producer Gazprom, whose subsidiaries service Europe’s gas consumption.

In China stocks rose on Friday as authorities pledged to support the economy and city officials said Shanghai would start to steadily ease coronavirus traffic restrictions and open shops this month.

SPI Asset Management managing partner Stephen Innes said in a note that oil traders were looking “for a glimmer of light at the end of China’s gloomy lockdown tunnel”.

“Still, we continuously end up at square one with lower case counts weighted against the authorities doubling down on their zero COVID policy,” Innes added.

In the United States, gasoline futures soared to an all-time high, boosting the gasoline crack spread - a measure of refining profit margins - to its highest since it hit a record in April 2020 when WTI settled in negative territory.

Automobile club AAA said US pump prices rose to record highs of $4.43 per gallon for gasoline and $5.56 for diesel.

Pressuring oil prices during the week, inflation and rate rises drove the US dollar to a near 20-year high against a basket of other currencies, making oil more expensive when purchased in other currencies.

The EU said there was enough progress to relaunch nuclear negotiations with Iran. Analysts said an agreement with Iran could add another 1 million bpd of oil supply to the market.

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