Oil prices climbed about 2% to a four-month high on Monday on expectations that wider U.S. sanctions on Russian oil would force buyers in India and China to seek other suppliers.

Brent futures rose $1.25, or 1.6%, to settle at $81.01 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.25, or 2.9%, to settle at $78.82.

That put Brent on track for its highest close since Aug. 26 and WTI on track for its highest close since Aug. 12, and kept both benchmarks in technically overbought territory for a second day in a row.

Moreover, with Brent and WTI front-month prices rising over 6% over the past three trading sessions, the premium of front-month contracts over later-dated futures, known in the energy industry as time spreads, soared to the highest in several months.

With interest in the energy market growing, total futures volume in Brent on the Intercontinental Exchange (NYSE:ICE) rose to its highest on Jan. 10 since hitting a record in March 2020. Open interest and total futures volumes for WTI on the New York Mercantile Exchange rose to their highest since March 2022.

Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to new U.S. sanctions on Russian producers and tankers that are designed to curb the revenues of the world's second-largest oil exporter.

Source : Reuters