Crude oil rebounds to above $101 a barrel as Ukraine crisis deepens and sanctions loom

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The price of oil rebounded to above $101 per barrel Monday as mounting tensions in Ukraine raised the likelihood of further Western economic sanctions against major energy producer Russia.

By early afternoon in Europe, benchmark U.S. crude for June delivery was up 48 cents to $101.08 a barrel in electronic trading on the New York Mercantile Exchange. The Nymex contract closed last week with a decline of $3.70, to $100.60.

Brent crude, an international benchmark for oil, was up 6 cents to $109.64 on the ICE Futures exchange in London.

U.S President Barack Obama said Monday in the Philippines that Washington would levy new sanctions on Russian individuals and companies, including high-technology exports to Russia’s defence industry, because of Moscow’s alleged provocations in Ukraine.

The European Union is also preparing to expand the list of Russian officials and businessmen who have been hit by asset freezes and travel bans.

Armed, pro-Russia insurgents in eastern Ukraine have been seizing government buildings and police stations, seeking greater autonomy for the region.

Oil, especially Brent, was also supported by the continued delays in Libya’s efforts to reopen oil export terminals held by militias. Libya’s exports stand around 220,000 barrels a day, down from 1.4 million barrels a day a year ago.

Still, abundant supplies and rising crude output in the United States kept prices from climbing higher.

“Crude production … is at its highest level since 1988 and last week we found out that oil inventories have reached a record high of 397.7 million barrels,” said Fawad Razaqzada, of Forex.com in London. “Both of these measures suggest that the growth in demand is so far unable to match, let alone outpace, the increasing oil supply.”

In other energy futures trading in New York:

– Wholesale gasoline was down 0.11 cent to $3.0255 a gallon.

– Heating oil added 0.19 cent to $2.9828 a gallon.

– Natural gas gained 4.1 cents to $4.688 per 1,000 cubic feet.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)