Oil jumps 4% as deaths near Kyiv prompt talk of new sanctions

Workers walk as oil pumps are seen in the background at the Uzen oil and gas field in the Mangistau region of Kazakhstan November 13, 2021. REUTERS/Pavel Mikheyev

NEW YORK, April 4 (Reuters) – Oil jumped around 4% to over $108 a barrel on Monday as rising civilian deaths in Ukraine increased pressure on European countries to impose sanctions on the Russian energy sector, raising further concerns among market participants about tighter supply. .

Global benchmark Brent crude rose $3.85, or 3.7%, to $108.24 a barrel as of 11:21 a.m. EDT (1521 GMT). U.S. West Texas Intermediate crude rose $4.11, or 4.1%, to $103.38 a barrel. Both contracts were down more than $1 earlier in the session.

German Chancellor Olaf Scholz says Russian President Vladimir Putin and his supporters will “feel the consequences” of the events in Bucha, outside the capital kyiv, where a mass grave and bound bodies shot at close range were discovered . Read more

Western allies would agree on new sanctions against Moscow in the coming days, he said, although the timing and scope of the new package were unclear.

French President Emmanuel Macron suggested oil and coal sanctions, adding that there were “very clear indications pointing to war crimes” by Russian forces.

The Russian invasion in February exacerbated supply concerns that were already supporting prices. The sanctions imposed on Russia and the avoidance of buyers of Russian oil have already led to a drop in production and raised fears of greater losses. Read more

“As the United States and the EU reduce their purchases of Russian oil, this leaves China and India as the main customers that remain and many refineries in these countries may be reluctant to buy Russian oil with the relations. negative public relations,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

Crude fell about 13% last week after President Joe Biden announced a record release of U.S. oil reserves and members of the International Energy Agency pledged to exploit more reserves. Brent crude hit $139 last month, its highest level since 2008. read more

“The massive release of 1 million barrels per day over a six-month period in the United States alone is likely to ensure that the oil market will no longer be acutely undersupplied in the second and third quarters,” wrote Carsten Fritsch of Commerzbank in a report.

Oil also gained support on Monday after a break in talks in Vienna to revive the Iran nuclear deal, which would allow sanctions on Iranian oil to be lifted. Iran on Monday blamed the United States for the shutdown. Read more

Downward pressure came from a truce in Yemen, which could ease threats to supplies in the Middle East.

The United Nations brokered a two-month truce between a Saudi-led coalition and the Iran-aligned Houthi group for the first time in seven years of conflict. Saudi oil facilities were attacked by the Houthis during the fighting. Read more

Reporting by Stephanie Kelly in New York; additional reporting by Alex Lawler in London and Florence Tan and Isabel Kua in Singapore; Editing by Marguerita Choy and Mark Porter

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