LONDON (REUTERS) - Oil prices rose on Monday (Feb 21) over the stand-off between Russia and the West over Ukraine, adding to supply concerns that have kept oil prices near US$100 a barrel.
Brent crude futures jumped US$2.74, or 2.91 per cent, to US$96.28 a barrel at about 3am on Tuesday morning, Singapore time. US West Texas Intermediate crude futures rose US$2.79, or 3.06 per cent, to US$93.86 a barrel.
Russian forces killed a group of five saboteurs who breached the country's south-west border from Ukraine on Monday, news agencies quoted the military as saying, an accusation that Ukraine called fake news.
French President Emmanuel Macron said earlier on Monday that United States President Joe Biden and his Russian counterpart Vladimir Putin had agreed in principle to a summit over Ukraine, but the Kremlin said there were no immediate plans.
US markets were closed on Monday for the Presidents' Day holiday.
"Oil prices are once again marching upwards, as the optimism of a Biden-Putin meeting fades, while Opec+ is continuing to struggle to hit its quotas, which have largely created the severe global energy deficit," said Mr Pratibha Thaker of the Economist Intelligence Unit.
Ministers of Arab oil-producing countries said on Sunday that Opec+ – the alliance of Opec countries and other suppliers including Russia – should stick to its current agreement to add 400,000 barrels per day of oil output each month, rejecting calls to pump more to ease pressure on prices.
Price gains have been limited by the possibility of more than a million barrels per day of Iranian crude returning to the market.
Iranian Foreign Ministry spokesman Saeed Khatibzadeh said "significant progress" had been made in talks to revive Iran's 2015 nuclear agreement on Monday after a senior European Union official said on Friday that a deal was "very, very close".
Analysts said the market remained tight and any addition of oil would help, but prices would remain volatile in the near term because Iranian crude was unlikely to return until later this year.
"If a Russian invasion (of Ukraine) takes place, as the US and Britain have warned in recent days, Brent futures could spike above US$100/barrel, even if an Iranian deal is reached," Commonwealth Bank analyst Vivek Dhar said in a note.