Oil rises as Russian-Western stalemate alarms tight market

An oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann

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  • Russian army says it killed Ukrainian saboteurs
  • The idea of ​​a US-Russian summit allays some war worries
  • Iran nuclear talks make ‘significant progress’

LONDON, Feb 21 (Reuters) – Oil prices rose on Monday as tensions between Russia and the West escalated, adding to supply issues that have kept oil prices near $100 a barrel .

Brent crude futures jumped $1.23, or 1.3%, to $94.77 a barrel as of 1300 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $1.13, or 1.2%, to $92.20 a barrel.

Russian forces on Monday killed a group of five saboteurs who crossed the country’s southwestern border from Ukraine, news agencies reported citing the military, an accusation Ukraine called fake news. Read more

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French President Emmanuel Macron said earlier on Monday that US President Joe Biden and Russian President Vladimir Putin had agreed in principle to a summit on Ukraine, but the Kremlin said there were no plans immediately for a meeting. Read more

US markets will be closed on Monday for the Presidents Day holiday.

“Energy could be clear collateral damage from a kinetic conflict between Russia and Ukraine,” said Helima Croft, global head of commodities strategy at RBC.

European Commission President Ursula von der Leyen said Russia would be cut off from international financial markets and denied access to key exports needed to modernize its economy if it invaded Ukraine. Read more

Meanwhile, ministers from Arab oil-producing countries said on Sunday that OPEC+ should stick to its current agreement to add 400,000 barrels per day (bpd) of oil production each month, dismissing calls to pump more to ease price pressure. Read more

Price gains were limited by the possibility of more than 1 million bpd of Iranian crude returning to the market.

Iranian Foreign Ministry spokesman Saeed Khatibzadeh said on Monday that “significant progress” had been made in talks to revive the 2015 Iran nuclear deal after a senior European Union official warned. said Friday that a deal was “very, very close.” Read more

Analysts said the market remained tight and any additional oil would help, but prices would remain volatile in the near term as Iranian crude is unlikely to return until later this year.

“If a Russian invasion takes place, as the US and UK have warned in recent days, Brent futures could rise above $100 a barrel, even if an Iran deal is reached,” Commonwealth Bank analyst Vivek Dhar said in a note.

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Additional reporting by Sonali Paul and Florence Tan; Editing by David Goodman, Jan Harvey and Tomasz Janowski

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