Global benchmark Brent crude ended the day at $107.53 for a gain of 3.01% and U.S. WTI crude settled $4.01, or 4.04%, higher at $103.28
Oil jumped on Monday, as mounting civilian deaths in Ukraine increased pressure on European countries to impose sanctions on Russia’s energy sector, prompting new concerns from market participants around tighter supply.
Global benchmark Brent crude ended the day at $107.53 for a gain of 3.01%. U.S. West Texas Intermediate crude settled $4.01, or 4.04%, higher at $103.28.
Both contracts were down more than $1 earlier in the session.
Western allies would agree on further sanctions against Moscow in coming days, German Chancellor Olaf Scholz said, though the timing and reach of the new package was not clear.
France’s President Emmanuel Macron suggested sanctions on oil and coal, adding there were very ‘clear clues pointing to war crimes’ by Russian forces.
Russia’s invasion in February has heightened supply concerns that were already underpinning prices. Sanctions imposed on Russia and buyers’ avoidance of Russian oil have already led to a drop in output and raised fears of larger losses.
As the U.S. and EU reduce purchases of Russian oil, it leaves China and India as the main customers that remain and many of the refineries in those countries might be reluctant to purchase Russian oil with the negative public relations associated, said Andrew Lipow, president of Lipow Oil Associates in Houston.
Crude dropped by about 13% last week after President Joe Biden announced a record U.S. oil reserves release and as International Energy Agency members committed to further tapping reserves. Brent crude hit $139 last month, its highest level since 2008.
The massive release of 1 million barrels per day over a period of six months in the United States alone is likely to ensure that the oil market is no longer acutely undersupplied in the second and third quarters, Commerzbank’s Carsten Fritsch wrote in a report.