U.S. crude soared on Monday, as President Barack Obama spoke about addressing violence in Ukraine which has heightened the geopolitical risk premium.
Investors remained on edge Monday, keeping an eye on the crisis between Moscow and the West after the downing of a civilian airliner in Ukraine pushed up oil prices last week. Increasing pressure from Europe could lead to further sanctions against Russia, raising the specter of supply disruptions from one of the world's top oil producers, analysts said.
Obama said Russian President Vladimir Putin has direct responsibility to compel separatists to cooperate with investigations into the downing of the plane. Putin so far appears unconcerned about increasing pressure that could lead to further sanctions against Moscow.
Meanwhile, Libya also remained in focus after heavy fighting between militias erupted around Tripoli airport on Sunday. Despite a slight reduction in output at the El Feel oilfield, Libya's output reached around 555,000 barrels per day last week, pressuring Brent prices.
U.S. crude oil rose above $104 earlier in the session, as traders expected a large drawdown of supply from Cushing, Oklahoma, the delivery point for the U.S. crude contract, analysts said. In addition, traders bought U.S crude and sold Brent ahead of the contract expiry this week, causing the spread between the two benchmarks to narrow.
--By Reuters. For more information on commodities, please click here.