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Oil rises above $100 a barrel as referendum adds to Ukraine tensions, EU expands sanctions

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The price of oil rose above $100 a barrel on Monday amid renewed tensions over Ukraine.

By early afternoon in Europe, benchmark U.S. crude for June delivery was up 29 cents to $100.28 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the contract fell 27 cents to close at $99.99.

Brent crude, a benchmark for international varieties, was up 65 cents to $108.54 on the ICE Futures exchange in London.

Traders are worried about turmoil in Ukraine and the prolonged disruption of oil exports from Libya despite muted demand and plentiful supplies.

Pro-Russian insurgents who organized divisive referendums in two regions of eastern Ukraine said about 90 per cent of voters have backed their calls for sovereignty. The Ukrainian and Western governments have condemned the balloting as a sham and a violation of international law.

There are concerns that Russian energy exports to Europe could be interrupted if further instability in Ukraine results in stronger Western sanctions. On Monday, Moscow said it had no intention to annex Ukraine's eastern provinces, while the European Union added 13 people to its list of 48 Russians and Ukrainians punished with visa bans and asset freezes over the Ukraine crisis.

For the first time, two companies will also face EU sanctions because of Ukraine, but tougher measures will not be implemented before the May 25 elections in the east European country.

The referendum "is likely to contribute to the further escalation of tensions between Ukraine and Russia and between the West and Russia," analysts at Commerzbank in Frankfurt said in a note to clients. "The risk of sanctions being extended at a later date to include companies from the Russian oil and gas sector has risen."

In other energy futures trading in New York:

— Wholesale gasoline added 2.24 cent to $2.9184 a gallon.

— Heating oil gained 1.84 cents to $2.9252 a gallon.

— Natural gas fell 4.4 cents to $4.487 per 1,000 cubic feet.

(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS.UN), (TSX:CVE)

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Raf Casert in Brussels contributed to this report.

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