Oil prices today: Oil climbs ahead of EU meeting on Russia sanction

Oil prices hit two-month highs on Monday as traders waited to see if the European Union would reach a deal on a Russian oil ban ahead of a meeting on a sixth sanctions package against Moscow over its invasion of Ukraine.

Brent crude futures gained 46 cents, or 0.4%, to $119.89 a barrel at 0111 GMT, while US West Texas Intermediate (WTI) crude futures jumped 60 cents, or 0.5%, to $115.67 a barrel, extending last week’s strong gains.

The EU is due to meet on Monday and Tuesday to discuss a sixth sanctions package against Russia for its invasion of Ukraine, which Moscow calls a “special operation” to disarm its neighbor.

“I don’t think it would be a stretch to assume that speculators are positioning themselves for a rebound in the oil market after the EU summit,” said Stephen Innes, managing partner at SPI Asset Management.

Any further bans on Russian oil would tighten an already tight crude market for supply amid growing demand for gasoline, diesel and jet fuel ahead of the peak summer season in the United States and Europe.

EU governments failed to agree on an embargo on Russian oil on Sunday, but will continue talks on a deal to ban maritime deliveries of Russian oil while allowing pipeline deliveries, before Monday afternoon summit, officials said.

If agreed, a deal would allow Hungary, Slovakia and Czechia to continue to receive their Russian oil through the Druzhba pipeline for a while until alternative supplies can be arranged.

Underscoring the tightness of the market, the Organization of the Petroleum Exporting Countries and its allies including Russia, collectively called OPEC+, are expected to push back on Western calls to ramp up their oil production additions at their Thursday meeting. They will stick to their plan to add 432,000 barrels a day in July, six OPEC+ sources told Reuters.

The oil market was also on edge after Iran said on Friday its navy seized two Greek tankers in retaliation for the United States’ confiscation of Iranian oil from a tanker held off the coast of Greece.

“This raises the specter of further disruptions to oil flows through the Strait of Hormuz, which carries a third of global trade,” analysts at ANZ Research said in a note.

Oil prices were also supported by a falling US dollar as investors reduced expectations of aggressive US rate hikes and fears of a global recession eased. A weaker dollar makes oil cheaper for importers holding other currencies.

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