Oil prices rose as the US and Europe prepared to impose further sanctions on Russia following alleged atrocities against Ukrainian civilians.
est Texas Intermediate climbed toward $105 a barrel after closing 4 percent higher on Monday, its biggest gain in two weeks.
Washington will announce additional measures this week, according to National Security Advisor Jake Sullivan, who said these could include energy restrictions.
European decision-makers, including French President Emmanuel Macron, also indicated scope for further steps.
Oil prices rebounded in the first quarter to their highest levels since 2008, as Russia’s invasion disrupted supplies in an already strained market faced with huge demand and dwindling inventories.
The US and Britain have already moved to block Russian oil, and momentum is gaining momentum for some sort of similar action by the European Union, though its dependence on the flows is greater.
“Given that Europe cannot snap its fingers away from the Russian energy market, I think these fears are overblown,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte. Moves in Asia could be exacerbated by reduced liquidity as Hong Kong and China are on vacation, he added.
With the war in Ukraine in its second month, Russia is facing allegations that its troops massacred civilians in Bucha and other cities, a charge Moscow denies.
Later on Tuesday, Ukrainian President Volodymyr Zelenskyy will address the United Nations Security Council and may call for new sanctions.
The possibility of new restrictions offsets the impact on the global crude oil market of a major US release of the country’s strategic oil reserves to tame prices, ease consumer pressure and curb inflation.
Other countries have announced that they will also undertake oil withdrawals.
Futures remain in backwardation, a bullish pattern characterized by short-term prices trading higher than longer-term ones. Brent’s prompt spread — the gap between the next two contracts — widened to $1.66 a barrel from $1.53 on Monday.
In another sign of tightness — as well as rising demand for Middle Eastern cargo as buyers avoid Russia — Saudi Arabia has hiked prices for all regions. Saudi Aramco raised its Arabian light crude for next month’s shipments to Asia to $9.35 a barrel above the benchmark it uses, a record spread.
Goldman Sachs Group Inc. said the market was likely running a deficit of 1.5 million barrels a day for the past few weeks, with inventories on a demand-adjusted basis the lowest in recent history. The most compelling near-term opportunities have been in distillates such as diesel and jet fuel, an April 3 note said.
Many Western companies don’t take Russian crude, although discounted exports go to buyers in Asia, including China and India.
On Monday, commodities trader Trafigura Group offered to sell a batch of Russia’s Ural grade at a record discount, but there were no bids for the supply.
https://www.independent.ie/business/world/oil-extends-surge-on-spectre-of-fresh-sanctions-against-russia-41521495.html Oil extends surge on specter of new sanctions on Russia