Crude prices increased on Monday as fears of tighter global supply grew, with the worsening crisis in Ukraine raising the risk of more sanctions from the West against Russia, the world’s leading exporter.
Brent futures were up $1.50, or 1.3%, at $113.20 a barrel, while WTI futures were up 98 cents, or 0.9%, at $107.93 a barrel.
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Both contracts surged more than 2.5% on Thursday, ahead of the Easter weekend holidays, on news that the European Union would phase in a ban on Russian oil imports.
Last week, EU governments said that the bloc’s executive was working on measures to ban Russian oil, but officials said Germany was not actively backing an immediate ban.
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Due to sanctions or purchasers voluntarily rejecting Russian shipments, the International Energy Agency has warned that around 3 million barrels per day (bpd) of Russian oil might be shut in from May onwards.
According to the Interfax news agency, Russian oil production continued to decline in April, falling by 7.5% the month compared to March.
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The Organization of Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ grouping, which includes Russia, have defied Western pressure to increase output at a faster rate under a previously agreed-upon accord to enhance supplies.
According to an OPEC report released last week, OPEC output increased by only 57,000 barrels per day in March, falling short of the 253,000 barrels per day increase allowed under the OPEC+ agreement.
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Libya halted oil production from its El Feel oilfield on Sunday, and Reuters reported that shipments had been halted after protesters demanding the resignation of Tripoli-based Prime Minister Abdulhamid al-Dbeibah took control of the sites.
Despite labour and supply chain constraints, oil production projections in the United States are being revised upwards, according to industry analysts, as higher prices stimulate more drilling and well completion activity.