Crude oil futures rose on Monday as tensions in Ukraine prompted the European Union to widen sanctions, while Russia reiterated that it could cut off Kiev’s natural gas supplies.
Russia’s state-owned Gazprom said that unless Kiev pre-paid for the next month’s natural gas deliveries by June 2, it would disrupt or reduce supplies.
Saudi Arabia said it would step in to cover any potential shortage of oil that could result from the tension between Russia and Ukraine, which reassured investors and capped gains in oil.
Pro-Moscow rebels in eastern Ukraine called for their region to become part of Russia on Monday after the groups said a referendum on self rule held one day earlier had found overwhelming support.
“Saudi Arabia is sending the signal that if Russia does decide to cut off the gas supply, we may actually get a flood of supply,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “On the oil front, it may be bearish because we will probably see a lot of oil released.”
In addition to potential supply increases from Saudi Arabia, Libyan officials said they planned to reopen late on Monday western oilfields and pipelines that had been blockaded by protesters. The oilfields could raise Libyan output by 500,000 barrels per day.
Increased Libyan oil exports would reduce Europe’s exposure to the crisis in Ukraine and could mean diplomats lower the bar for sanctions on Russia, analysts said.
The European Union expanded sanctions against Russia, targeting two Crimean companies and 13 people in its first attempt to aim at corporations rather than individuals.
Brent crude settled 52 cents higher at $108.41 a barrel, while U.S. crude gained 60 cents to $100.59 a barrel.
U.S. crude futures remain in a trading range between $98 and $102 per barrel with expectations for a further draw at the Cushing, Oklahoma, delivery point providing support for the contract.
“The increased geopolitical risk has given (U.S. crude) a little support, but really it’s around $100 and looking for its next driver,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Investors kept an eye out for industrial production and retail sales data expected from China on Tuesday.
On Friday, China pledged to move ahead with a broad range of reforms to the country’s capital markets in a bid to increase transparency, encourage more efficient capital allocation and increase openness to foreign investment.
The U.N. nuclear watchdog and Iran ended a three-hour meeting without announcing any new action to help allay concern about Tehran’s atomic activities, leaving it unclear whether headway was achieved.
Any sign of progress towards a final resolution to the West’s dispute with Tehran would pressure oil prices on anticipation of a ramp-up in Iranian oil exports. 
Source: Reuters