Sonali Paul

MELBOURNE, (Reuters) – Oil prices increased on Tuesday as the European Union intensified its plans to increase sanctions against Russia. Germany indicated that it is ready to support an immediate oil embargo.

Futures rose by 25 cents or 0.2% to $107.83 per barrel at 0234 GMT. U.S. West Texas Intermediate crude futures (WTI), however, gained 17 cents or 0.2% to $105.34 per barrel.

Stephen Innes of SPI Asset Management, managing partner, stated, “Crude oil prices are rising after Germany’s economy minister made comments that noted the EU plan to ban Russian imports in the near future or in several months.”

On Tuesday, the European Commission will finish work on a sixth set of sanctions by the European Union against Russia for its actions in Ukraine. This would include an end to Russian oil purchases.

Two EU officials stated Monday that the embargo could spare Hungary and Slovakia who are both highly dependent on Russian oil.

After a volatile session, tight fuel products supplies have pushed up crude oil demand. This drove Brent and WTI higher by over 40 cents each on Monday.

ANZ Research analysts stated in a note that record exports to the U.S. Gulf have impacted domestic supplies. According to Vortexa Analytics cargo tracking, approximately 2 million barrels of diesel, gasoline and jet fuel left U.S. Gulf oil refineries every day between April 2004 and April 2005.

ANZ stated that diesel crack, or the margin to refine a barrel into oil products from crude oil, has increased to $73.50 a liter, its highest level since 1986.

Traders are going to be watching closely the U.S. inventory data. The American Petroleum Institute will report stockpiles for Tuesday’s week ending April 29, while the Energy Information Administration reports government data on Wednesday.

Five analysts polled for Reuters by Reuters about the average anticipated inventories falling by 1.2 Million barrels during week ending April 29.

Also, they forecast that gasoline stocks would fall by 300,000. Barrels, and distillate inventories will decline by 1.2million barrels.