Oil prices closed mixed on Thursday as supply concerns and geopolitical tensions in Europe overcame economic concerns that plagued financial markets as inflation soared.

Brent crude fell 6 cents to settle at 107.45 dollars a barrel. WTI crude rose 42 cents, or 0.4%, to settle at $106.13. A pending EU ban on oil from Russia, a major supplier of crude and fuel to the bloc, is expected to further tighten global supplies.

The EU is still bidding on details of the Russian embargo, which needs unanimous support. However, the vote has been postponed as Hungary opposes the ban as it would be too disruptive to its economy.

More broadly, oil prices and financial markets have come under pressure this week amid jitters over a rate hike, the dollar's strongest in two decades, concerns over inflation and a possible recession. The prolonged COVID-19 lockdown at the world's top crude importer.

The slump in demand growth couldn't have come at a better time, with China seemingly on the verge of locking down the capital Beijing at any given moment, said Bob Yawger, director of energy futures at Mizuho.

Oil Prices Jump After Trying to Survive

The headline US CPI for the 12 months to April jumped 8.3%, stoking concerns about a larger rate hike, and the impact on economic growth. Brent crude was down $1.92, or 1.8%, at $105.59 a barrel by 12:02 GMT. WTI crude fell $1.79, or 1.7%, to $103.92 a barrel.

Soaring pump prices and slowing economic growth are expected to significantly curb the demand recovery throughout the rest of the year and into 2023, the International Energy Agency (IEA) said Thursday in its monthly report.

On Wednesday, oil prices jumped 5% after Russia sanctioned 31 companies based in countries that imposed sanctions on Moscow following the invasion of Ukraine.

That created jitters in markets at the same time that Russian natural gas flows to Europe via Ukraine fell by a quarter. This is the first-time exports through Ukraine have been disrupted since the invasion.

Oil prices fell on Thursday in a turbulent week as fears of recession-hit global financial markets, outweighed supply concerns and geopolitical tensions in Europe.

Oil prices have come under pressure this week, along with global financial markets, amid jitters over rising interest rates, the strongest US dollar in two decades, concerns over inflation, and a possible recession.

Government Steps Against Oil Prices

Those recession fears are getting louder and sent oil lower this morning, said Howie Lee, an economist at Singapore's Oversea Chinese Banking Corp., pointing to strong US consumer price index (CPI) data on Wednesday.

The headline US CPI for the 12 months to April jumped 8.3%, stoking concerns about a larger rate hike, and the impact on economic growth. A pending EU ban on oil from Russia, the EU's top supplier of crude and fuel, could further tighten global supplies.

The European Union is still bidding on details of the Russia embargo. The vote required unanimous support but has been postponed as Hungary opposed the ban as it would be too disruptive to its economy.

The expected oil embargo keeps the underlying oil balance tighter than it already is, especially on the product front. Implementing these sanctions, however, is a difficult task, said PVM analysts.

The prolonged COVID-19 lockdown at the world's top crude importer, China, is also having an impact on the market. The price gains have been limited by concerns about demand crushing in China, due to efforts to curb the spread of the coronavirus.