U.S. President Barack Obama addresses a news conference with Japanese Prime Minister Shinzo Abe in Tokyo
US President Barack Obama addresses a news conference in TokyoReuters

Brent crude oil rose well above $109 a barrel on Wednesday after US President Barack Obama signalled that Washington was ready to impose deeper sanctions on Russia over the Ukraine crisis.

Speaking on his trip to East Asia, Obama said more economic sanctions were "teed up" if Russia fails to abide by the agreement signed in Geneva last Thursday.

Benchmark Brent crude hit $109.28 by 0816GMT while US Crude rose to $101.71 a barrel.

Prices were kept relatively in check after the US reported a rise in crude oil stocks on Wednesday, which are now at their highest level since records began in 1982.

The escalating conflict between Russia and the West over Ukraine has fuelled fears over energy supplies to European markets.

Russian energy giant Gazprom has threatened to cut off gas supplies to Ukraine after the Kiev government refused to pay an increased price for natural gas. That prompted the Russian President to warn European leaders that their supplies could be affected by the standoff with Kiev.

The European Union relies on Russia for around a third of its gas needs, 40% of which arrives via pipelines through Ukraine. Moreover, Russia is also one of the world's top oil producers and any escalation in the conflict could cause tumult on the global energy markets.

Washington and Brussels imposed asset freezes and travel bans on a number of individuals with close ties to the Kremlin and a Russian bank after Moscow annexed the Crimea region last month.

Meanwhile. the lack of oil flowing from Libya's recently opened ports also supported the Brent price. While two oil ports previously occupied by rebel groups were recently handed over to the government, only one port has begun functioning.

The port of Zueitina has been hampered by technical issues since it was returned and has so far not been able to reopen, the Libyan government said this week.