Oil prices gained by $2 on Monday, after easing from $130 a barrel that hit in the first week of March, as Ukrainian forces dug in against heavy Russian attacks. Major oil producers reported that they were struggling to produce their allotted quotas under a supply agreement.

Share Market Live

NSE

Brent crude futures climbed $1.96, or 1.8 percent to $109.89 a barrel at 0039 GMT, adding to a 1.2 percent rise last Friday. US West Texas Intermediate (WTI) crude futures rose $2.09 or 2 percent to $106.79, extending a 1.7 percent jump last Friday.

Oil prices moved higher after Ukraine's deputy prime minister Iryna Vershchuk said early on Monday that there was no chance that the country's forces would surrender in the besieged eastern port city of Mariupol. With little sign of easing the conflict, the focus returned to whether the market would be able to replace Russian barrels hit by sanctions.

Also Read:

Ukraine war: Russia's energy clout doesn't just come from oil and gas it's also a key nuclear supplier

The latest report from the Organization of the Petroleum Exporting Countries and allies including Russia, together called OPEC+, showed some producers are still falling short of their agreed supply quotas.

Also Read: Fed's balance-sheet reduction is next big challenge for markets

OPEC+ missed their production target by more than 1 million barrels per day (bpd) in February under their pact to boost output by 400,000 bpd each month as they wind back sharp cuts made in 2020, according to Reuters.

Also Read: Diesel price for bulk users hiked Rs 25 per litre; private retailers stare closure

The two OPEC countries that have the capacity to instantly raise output, Saudi Arabia and the United Arab Emirates, have so far resisted calls from major consuming nations to step up production faster to help drive down oil prices.

The poor supply outlook and high prices prompted the International Energy Agency on Friday to outline ways to cut oil use by 2.7 million bpd within four months - including car-pooling, lower speed limits and cheaper public transport. That would help offset the 3 million bpd of Russian crude and products that the IEA estimated would be off the market by April.

-With agency inputs

First Published:Mar 21, 2022 7:25 AM IST