© Reuters. FILE PHOTO: Oil tankers sail along Nakhodka Bay near the port city of Nakhodka, Russia August 12, 2022. REUTERS/Tatiana Meel/File Photo
By Stephanie Kelly
(Reuters) – Oil prices edged higher on Tuesday, after a G7 price cap on Russian seaborne oil came into force on Monday on top of a European Union embargo on imports of Russian crude by sea.
futures had risen 66 cents to $83.34 a barrel by 0108 GMT. West Texas Intermediate crude (WTI) rose 70 cents to $77.63 a barrel.
Futures fell more than 3% in the previous session, after U.S. service sector data raised worries that the Federal Reserve could continue its aggressive policy tightening path.
The Group of Seven price cap comes as the West tries to limit Moscow’s ability to finance its war in Ukraine, but Russia has said it will not abide by the measure even if it has to cut production.
The price cap, to be enforced by the G7 nations, the European Union and Australia, comes on top of the EU’s embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain.
Meanwhile, the Organization of the Petroleum Exporting Countries and allies including Russia, together called OPEC+, agreed on Sunday to stick to their October plan to cut output by 2 million barrels per day (bpd) beginning in November.
The Group of Seven (G7) countries and Australia last week agreed on a $60 a barrel price cap on seaborne Russian oil.
In China, more cities eased COVID curbs over the weekend, prompting optimism for increased demand in the world’s top oil importer.
Business and manufacturing activity in China, the world’s second-largest economy, have been hit this year by strict measures to curb the spread of the coronavirus.