Title: Oil jumps as EU mulls Russian ban, Saudi refinery output hit

Mar 21, 2022 01:00 AM ET

By: AnalysisWatch

Oil prices climbed $3 on Monday, with Brent surging past $110 a barrel as European Union countries contemplated siding with the United States in a Russian oil embargo, while an assault on Saudi oil facilities over the weekend created jitters.

Brent crude futures were up $3.44, or 3.2 percent, to $111.37 per barrel at 11:43 p.m. ET, after rising 1.2 percent the previous day.

U.S. West Texas Intermediate crude futures climbed $3.54, or 3.4%, to $108.24, extending last Friday's 1.7% gain.

Prices increased ahead of talks this week between European Union governments and U.S. President Joe Biden at a series of summits aimed at tightening the West's response to Moscow over its incursion into Ukraine.

EU governments will debate whether to implement an oil embargo on Russia.

Earlier on Monday, Ukraine's deputy prime minister, Iryna Vershchuk, said there was no chance that Ukrainian forces in the besieged eastern port city of Mariupol would surrender.

With little sign of the conflict relaxing, the focus shifted back to whether the market would be able to substitute for the Russian barrels impacted by the sanctions.

Three sources told Reuters news agency that OPEC+ missed its production target by more than a million barrels per day (BPD) in February, despite agreeing to increase output by 400,000 BPD each month to reverse the drastic 2020 cuts.

US energy companies are also grappling to sustain active rig counts despite high prices.

The sluggish supply outlook and elevated prices led the International Energy Agency on Friday to outline ways to lower oil demand by 2.7 million barrels a day in four months—from carpooling to reduced speed limits to lower-cost public transport.

This would help offset the IEA's forecast of 3 million BPD of Russian crude and products that would vanish from the market by April.