By Adedapo Adesanya
Brent crude hit $121.70 per barrel on Monday after rising by $2.24 or 1.88 per cent as traders turned their attention to whether the European Union (EU) will finally reach an agreement on banning Russian oil.
Also, the US West Texas Intermediate (WTI) crude rose $2.10 or 1.82 per cent to $117.20 per barrel as the bloc continues talks on Tuesday on the sixth package of sanctions against Russia for its invasion of Ukraine.
Any further ban on Russian oil would tighten a crude market already strained for supply amid rising demand for petrol, diesel, and jet fuel.
EU governments failed to agree on an embargo on Russian oil on Sunday but will continue talks on a deal to ban seaborne deliveries of Russian oil while allowing deliveries by pipeline.
If agreed, a deal would allow Hungary, Slovakia and Czech Republic to continue to receive their Russian oil via the Druzhba pipeline for some time until alternative supplies can be arranged.
Support also came for the market ahead of the peak summer demand season in the United States and Europe.
Oil prices were also supported by a fall in the US Dollar as investors prepare for aggressive US rate hikes and as fears eased about a global recession. A weaker dollar makes oil less expensive for importers holding other currencies.
These bullish factors helped ease the pressure as a stronger US Dollar made it expensive for holders of other countries to buy crude oil.
Despite this, the US Dollar Index, which pits the dollar against a basket of six global currencies, is hovering around 20-year highs. Since the beginning of the year, the Dollar index has gained 8 per cent; and in the last 12 months, it has risen 14 per cent.
Gains also came as the Organisation of the Petroleum Exporting Countries and allies, including Russia, together called OPEC+, are set to ignore calls to speed up their oil output additions when they meet on Thursday, June 2.
The latest round of calls came from Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, which make up the Group of Seven (G7) urging the cartel to pump more oil.
However, they will likely stick to their plan to add 432,000 barrels per day in July.
Modupe Gbadeyanka