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Crude settles up more than 7% as EU mulls Russian oil ban

Commodities Mar 21, 2022 03:06PM ET
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© Reuters. FILE PHOTO: A view of the Phillips 66 Company's Los Angeles Refinery (foreground), which processes domestic & imported crude oil into gasoline, aviation and diesel fuels, and storage tanks for refined petroleum products at the Kinder Morgan Carson Termina
 
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By Marcy de Luna

HOUSTON (Reuters) -Oil prices settled up more than 7% on Monday, with global benchmark Brent climbing above $115 a barrel, as European Union nations disagreed on whether to join the United States in a Russian oil embargo after an attack on Saudi oil facilities.

Brent futures settled at $115.62 per barrel, up $7.69 or 7.12%, while U.S. West Texas Intermediate (WTI) crude futures settled at $112.12 per barrel, up $7.42 or 7.09%.

Such an embargo "could be the precipice for global trouble supply-wise," said John Kilduff, a partner at Again Capital LLC.

Given the uncertainty about the EU's potential ban of Russian petroleum imports, U.S. gasoline futures jumped 5%.

European Union governments will consider whether to impose an oil embargo on Russia over its invasion of Ukraine as they gather this week with U.S. President Joe Biden for a series of summits designed to harden the West's response to Moscow.

The EU and allies have already imposed a panoply of measures against Russia, including freezing its central bank's assets.

Ukraine defied a Russian demand that its forces lay down arms before dawn on Monday in Mariupol, where hundreds of thousands of civilians have been trapped in a city under siege.

With little sign of the conflict easing, the focus returned to whether the market would be able to replace Russian barrels hit by sanctions.

"Optimism is seeping away about progress in talks to achieve a ceasefire in Ukraine and that’s sent the price of oil on the march upwards," Susannah Streeter, senior markets analyst at UK-based asset manager Hargreaves Lansdown (LON:HRGV), said.

Over the weekend, attacks by Yemen's Iran-aligned Houthi group caused a temporary drop in output at a Saudi Aramco (SE:2222) refinery joint venture in Yanbu, feeding concern in a jittery oil products market, where Russia is a major supplier and global inventories are at multi-year lows.

Saudi Arabia on Monday said it would not be responsible for any global oil supply shortages after these attacks, in a sign of growing Saudi frustration with Washington's handling of Yemen and Iran.

The latest report from the Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, showed some producers are still falling short of their agreed supply quotas.

Oil prices were also sensitive to talk of Hong Kong lifting COVID-19 restrictions, which could increase demand, and to the growing list of U.S. companies retreating from Russia - including Baker Hughes, ExxonMobil (NYSE:XOM), Shell (LON:RDSa), and BP (NYSE:BP).

Crude settles up more than 7% as EU mulls Russian oil ban
 

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Comments (14)
jason xx
jason xx Mar 21, 2022 2:13PM ET
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The EU needs to send an Expeditionary Force into Ukraine at the very least to rescue civilians.
jason xx
jason xx Mar 21, 2022 2:12PM ET
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It's a sin to be worrying about oil prices while women and children are being destroyed.
Bhagwan Dass
Bhagwan Dass Mar 21, 2022 12:23PM ET
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one master with 32 dogs
Ella Yassin
Ella Yassin Mar 21, 2022 10:31AM ET
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Good let this eu happy with pump price there on rising... Haha
Timochin Khan
Timochin Khan Mar 21, 2022 9:33AM ET
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Russia sells its oil cheaper to India and China, but the problem is what does Russia get for payment, Gold, Yuan or Rupees?
Ella Yassin
Ella Yassin Mar 21, 2022 9:33AM ET
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Any currency from countries againt the sanctions should be no problem.
Edward Adigunawan
Edward Adigunawan Mar 21, 2022 9:31AM ET
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it is what you do that u get to pay high oil price. enjoy it
Roop Misir
Roop Misir Mar 21, 2022 8:56AM ET
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"European Union nations considered joining the United States in a Russian oil embargo and after a weekend attack on Saudi oil facilities". Conflicting news every day. Is the EU actually going to wean itself of Russian crude? Pure talk ... may be good for volatility and trading....!
perplexed76 .
perplexed76 . Mar 21, 2022 4:21AM ET
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"Houthi group".. i wonder who can order these terrorists to do this? Hm... Finish with Putin and go futher.
Meru Pet
Meru Pet Mar 21, 2022 4:19AM ET
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interesting
Shep De
Shep De Mar 21, 2022 2:03AM ET
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Why, just because you have a unprepatedness to yourself, would you continue to take "blood money" from Russia, why, European Union. One word: sick . USA took the lead, sure, not as dependent on Russia, but there are other ways to get oil. Stop this double standard, hypocritical, self-serving, reasoning that's a reason Russia remains stronger in the war pummeling Ukrainian civilians because the Ukrsine army is more than holding its own. Start to be on ONLY one side, EU, the allies, demoralizing too to keep accepting Russian oil /gas God bless ya
ottin nerner
ottin nerner Mar 21, 2022 2:03AM ET
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don't worry EU will buy it from Turkey as proxy of Russia.... Turkey will the premium while Russia will get market value.... Turkey is known middleman for centuries if you want to trade with the east.... even during N@zi era to Soviet era they are always the middleman....
ottin nerner
ottin nerner Mar 21, 2022 2:03AM ET
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there is no replacement for Siberian Crude except the Venezuelan Crude.... Siberian Crude (diesel for their powerplants) is different from Middle-Eastern Crude(gasoline)....
Meru Pet
Meru Pet Mar 21, 2022 2:03AM ET
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blood heating and blood transportation from blood agriculture 🙄
Tre Hsi
Tre Hsi Mar 21, 2022 2:03AM ET
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US took plenty of oil from Saudi Arabia, so let's not pretend US has any kind of moral highground....
 
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