London, Reuters—Brent crude oil slipped below 110 US dollars a barrel on Monday, consolidating near seven-week highs as the United States imposed more sanctions on Russia over the Ukraine crisis.
Signs that Libya may soon reopen a small oil port helped take some pressure off the crude market, traders said.
US President Barack Obama announced a third round of sanctions against Russian individuals and companies on Monday aimed at stopping Russian President Vladimir Putin from fomenting rebellion in eastern Ukraine.
Obama has made clear the US will slap sanctions on key sectors of the Russian economy, including the energy sector, if Russia launches a military move deeper into Ukraine.
In eastern Ukraine, pro-Moscow rebels seized public buildings in another town. Interfax news agency reported the mayor of a major eastern city, Kharkiv, had been shot and was undergoing an operation.
June Brent Crude eased 40 cents at 109.18 dollars a barrel by 1350 GMT, after settling down 75 cents on Friday. US crude for June delivery added 40 cents to 101.00 dollars a barrel.
“The Brent price is likely to find continued support from the uncertainty over the way the situation will play out in east Ukraine and from the possibility of delivery outages,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.
Russia’s oil pipeline monopoly Transneft has said it is worried Ukraine may take control of its oil product pipeline to Hungary.
“Russia has shaken up the global energy scene by showing its willingness to employ energy as a political weapon,” said David Hufton, managing director of London-based brokerage PVM Oil Associates.
“The world’s largest energy supplier and exporter has reminded customers that it is not a reliable source of supply,” he added.
Libya is lifting force majeure from the eastern oil port of Zueitina on Monday, state-run National Oil Corp said, paving the way to restart exports at a second port after a deal with rebels to unblock major terminals.
US crude narrowed the gap with Brent to around 8.20 dollars a barrel after it stretched as wide as 9.28 dollars on Friday.
Analysts blamed record-high crude inventories in the US for depressing US crude prices despite a rise in refinery utilization rates.