Oil prices rise ahead of G7 talks on new sanctions against Russia – Reuters.com

Crude oil storage tanks are seen at the Kinder Morgan Terminal in Sherwood Park, near Edmonton, Alberta, Canada, November 14, 2016. REUTERS / Chris Helgren

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LONDON, June 27 (Reuters) – Oil prices rose in an unstable session on Monday as investors waited for any moves against Russian oil and gas exports that could result from a meeting of G7 leaders in Germany.

Prospects for even tighter supplies loomed over the market as Western governments sought ways to reduce Russia’s ability to fund its war in Ukraine, although G7 leaders were also expected to discuss reviving Iran’s nuclear deal, which could lead to an increase in Iranian oil. exports.

Members of the Organization of the Petroleum Exporting Countries and their allies, including Russia, known as OPEC +, are likely to stick to a plan to accelerate oil production in August when they meet on Thursday, sources said. Read more

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But for now, growing supply concerns have outweighed growing concerns about the potential for a global recession following a string of poor economic data from the United States, the world’s largest oil consumer.

Libya’s national oil company, a member of OPEC, said Monday it may have to halt exports to the Sirte Bay area within 72 hours due to unrest that has limited production.

Brent crude futures rose 46 cents to $ 113.58 a barrel to 10:48 GMT after rising 2.8 percent on Friday. U.S. West Texas Intermediate oil was at $ 107.82 a barrel, up 20 cents, or 0.19%, after an increase of 3.2% in the previous session.

Both contracts fell last week for the second week in a row as rising interest rates in key economies strengthened the dollar and sparked fears of a recession.

G7 leaders, who began their meeting on Sunday, are expected to discuss options to address rising energy prices and replace Russian oil and gas imports, as well as further sanctions that do not worsen inflation. Read more

These measures include a possible cap on Russian oil export prices to reduce Moscow’s revenues while limiting damage to other economies. Read more

“It is unclear whether the price cap will achieve this outcome,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

“There is still nothing to stop Russia from banning the export of oil and refined products to the G7 economies in response to the price cap, which exacerbates the conditions of shortages in global oil and refined markets.”

The G7 will also discuss the possibility of reviving Iran’s nuclear talks after the European Union’s foreign policy chief met with senior officials in Tehran to try to unblock stalled talks, a French presidency official said on Sunday. Read more

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Additional reporting Florence Tan; Editing: Simon Cameron-Moore, Christian Schmollinger and Louise Heavens

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