- Brent crude returned more than a $ 110 barrel on Monday as the Ukraine attack added to the concern.
- The weekend peace talks failed to move forward and Ukraine refused to offer the besieged port of Mariupol.
- Media reports say the EU is considering a ban on Russia's oil exports, and Chinese Covid cases raise concerns about the need.
Brent crude futures rose 3.72% with a $ 111.65 barrel very early in Europe, while West Texas Intermediate gained 3.8% to trade at about $ 108.62 a barrel.
Delegates from Russia and Ukraine also held embassy talks over the weekend, but made little progress in reaching any kind of agreement. The port city of Mariupol has been under siege for four weeks and Russia has asked Ukraine to donate the city - Ukrainian Deputy Prime Minister Iryna Vereshchuk closed the request.
"There will be no doubt about any commitment, to lay down arms," Vereshchuk was quoted as saying by the Ukrainian newspaper Ukrainska Pravda. "We have already informed the Russian side of this."
The change in tone in peace talks has had a devastating effect on oil prices, according to Commerzbank analysts.
"News from Russia and Ukraine about peace talks no longer sounds as optimistic as it once did, which no doubt prompted the market to reconsider the situation," they said.
Elsewhere, media reports have suggested that the EU may block Russian oil exports, following US steps as President Biden prepares for the summit. Russia is the third largest producer of oil in the world and supplies about half of the EU's natural gas. Traders have been avoiding Russian crude oil supplies for weeks now, but the flow of natural gas has continued without interruption of pipelines.
"However, oil prices are rising again, with reports that the EU was considering blocking oil exports to Russia, ahead of a summit this week to be attended by President Biden," IG analysts said.
China continues to grapple with the growing number of Covid cases as millions of citizens, too, are closed. ING analysts suspect that an increase in the number of cases is also contributing to the current d
ecline in oil market prices.
"The market is struggling to quantify the impact of Russian oil exports and potential demand in China due to Covid's recent outbreak," said ING analyst Warren Patterson.
Commerzbank also noted an IEA report last week on long-term oil shortages that could be the result of an ongoing crisis as a major impact.
"Wednesday's forecast from the International Energy Agency is likely to have a significant impact: it predicts that the market will lose 3 million barrels of crude oil and oil products a day from Russia since April,"
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