Oil prices fell on Monday, with investors dropping profits after rising in the previous session, but the European Union (EU) is preparing for a phased imposition of import bans from Russia, raising concerns about global supply.
Brent crude futures were down 64 cents, or 0.6%, at 110 110.91 a barrel at 0137 GMT, while US West Texas Intermediate (WTI) crude futures were down 60 cents, or 0.5%, at 10 109.89 a barrel.
Both benchmarks, which jumped about 4% last Friday, have risen more than $ 1 per barrel before, with WTI reaching a high of $ 111.71 since March 28.
Kazuhiko Saito, chief analyst at Fujitomi Securities Company Limited, said the oil market is expected to gain ground this week due to the European Union’s pending sanctions on Russian oil.
Despite concerns about supplies to Eastern Europe, the EU still aims to agree to a phased embargo on Russian oil this month, four diplomats and officials said Friday, rejecting delays or rejecting water reduction proposals.
Last week, Moscow – which has called its actions in Ukraine a “special military operation” – imposed sanctions on several European power organizations, raising concerns about supplies.
Meanwhile, US petrol futures set new all-time highs on Monday as falling stockpiles raised concerns.
Saito of Fujitomi Securities said: “Oil prices were bullish, especially in the wake of the WTI’s near-term agreement, as US oil prices continued to rise amid weak imports of petroleum products from Europe.”
In terms of supply, U.S. energy firms have added oil and natural gas rigs to a row for the eighth week in a row since May 13 because of higher prices and the federal government’s persuasion to persuade drillers to return to the Wellpad.
Elsewhere, OPEC + – the Organization of the Petroleum Exporting Countries (OPEC) and its allies – including Russia – are undershooting some OPEC members’ previously agreed plans to increase output due to low investment in oil and, more recently, losses in Russian production.
The latest monthly report from OPEC shows that its production in April rose by 153,000 barrels per day (bpd) to 28.65 million bpd, lagging behind the 254,000 bpd increase approved by OPEC under the OPEC + agreement.