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May 5, LONDON Reuters Oil prices extended gains on Thursday on supply concerns after the European Union laid out plans for new sanctions against Russia, including an embargo on crude in six months, offsetting concerns over weaker Chinese demand.

Brent crude was up 36 cents, or 0.3, at 110.50 a barrel by 1007 GMT. U.S. West Texas Intermediate crude rose 4 cents, or less than 0.1, to 107.85.

Both benchmarks gained more than 5 a barrel on Wednesday.

The sanctions proposal, which needs unanimous backing from the 27 EU countries, also includes a phasing out of imports of Russian refined products by the end of 2022 and a ban on all shipping and insurance services for the transportation of Russian oil. 

The oil market has not fully priced in the potential of an EU oil embargo, so higher crude prices are to be expected in the summer months if it39;s voted into law, said Rystad Energys head of oil markets research, Bjornar Tonhaugen.

The French environment and energy minister, Barbara Pompili, said she was confident that European Union member states will reach a consensus on sanctions by the end of this week.

The planned EU oil embargo represents a massive logistical challenge for oil markets, said Investecs head of commodities, Callum Macpherson.

Rerouting Russian output from…