Sonali Paul

MELBOURNE, (Reuters) – Oil prices rose on Wednesday after stocks dropped last week. This was in response to industry data showing that oil supplies were tightened by Russia’s economic sanctions.

After falling 14 cents during the last session, futures rose by $1.06 (or 0.9%) to $116.54/barrel at 0213 GMT.

U.S. West Texas Intermediate crude oil futures increased 0.8% to $110.14 per barrel after falling 36 cents Tuesday.

Although oil prices fell Tuesday due to the likelihood that the European Union would not agree to an oil ban, they remain on edge about Russia sanctions when Joe Biden, President of the United States, meets with European leaders to discuss Russia’s attack on Ukraine. This is something Moscow considers a special operation.

The supply remains limited. Market sources have revealed that crude stock fell by 4.3million barrels during the week of March 18 according to the American Petroleum Institute. This defies analysts’ expectations for an increase. [API/S]

Reuters polled nine analysts and found that they had each estimated an increase of 100,000 barrels in crude oil inventories between March 18th and March 18th.

Saudi Arabia and the United States are the only two countries that could meaningfully offset Russia’s oil loss. However, it is unlikely we will get additional supplies from either of these countries right now. “The Commonwealth Bank analysts stated in a note that although the situation seems unusual and makes things more fluid, they are still in a very unique position.”

On Wednesday, the Energy Information Administration is expected to release official U.S. inventories data.