Oil prices climbed sharply on Monday, posting their highest finish in almost two weeks, as European Union foreign ministers considered a ban on Russian energy as punishment over that country’s nearly monthlong invasion of Ukraine.
West Texas Intermediate crude for April
delivery climbed $7.42, or 7.1%, to settle at $112.12 a barrel on the New York Mercantile Exchange. The front-month April contract, which expires at the end of Tuesday’s session, dropped 4.2% last week, according to Dow Jones Market Data.
May Brent crude
rose $7.69, or 7.1%, to $115.62 a barrel on ICE Futures Europe, after dropping 4.2% last week. Brent and WTI oil futures settled at their highest levels since March 8, when prices ended at their highest since 2008.
rose 4.1% to $3.372 a gallon, following a 2.2% decline last week, while April heating oil
jumped 5.6% to $3.801 a gallon, after a 5.3% climb last week.
April natural gas
rose 0.8% to $4.90 per million British thermal units, after last week’s 2.9% gain.
The potential for the EU to expand sanctions to Russian energy has “sparked a bullish leg” for oil, analysts at Blue Line Futures told clients in a note Monday.
Support for an EU-wide ban on the purchase of Russian oil is growing inside the bloc, The Wall Street Journal reported Monday, citing diplomats involved in the discussion.
Ahead of a meeting of the bloc’s foreign minsters on Monday, Lithuania’s representative Gabrielius Landsbergis and Ireland’s Simon Coveney both expressed support for imposing sanctions on Russian energy, Reuters reported.
The U.S. and U.K. have both banned Russian oil, but the EU is much more conflicted, give its reliance on that country’s energy supplies. The discussions follow another weekend of death and destruction in Ukraine, with heavy Russian shelling across the country, and a diplomatic solution still seemingly far off.
The EU is much more dependent on Russian oil, “covering almost 30% of its import needs with crude oil from Russia,” said Commerzbank analyst Carsten Fritsch, in a note to clients. “In the case of diesel, Russian oil even accounts for as much as 80% of its net imports.”
“This means that large quantities would have to be obtained elsewhere, which would further tighten the market. This would then further step up the pressure on OPEC+ to produce more oil,” he said.
In the latest developments, Russia was accused of shelling an art school sheltering 400 people, and Ukraine rejected a Moscow ultimatum that Ukrainians in the besieged city of Mariupol surrender their weapons in exchange for a safe exit.
President Joe Biden will stop in Poland this week before arriving in Brussels for urgent talks with NATO and European allies on a continuing response to Russia’s aggression, along with boosting the bloc’s own deterrence and defense.
Read: Gas prices fall for first time in 12 weeks, but expert says decline may be short-lived
Also helping lift prices of oil Monday was an attack on Saudi Arabian facilities over the weekend by Houthi rebels. “Though no serious damage was caused, this make it clear that supply outages are also a distinct possibility there, which would be virtually impossible to offset in current environment,” said Fritsch.
Read: Saudi Arabia says it ‘won’t bear any responsibility’ for global oil shortage after Houthi rebel attacks
Oil futures contracts logged hefty losses last week, as investors grew optimistic over negotiations between Russia and Ukraine, which faded by the end of the week.
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