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TOKYO, May 16 Reuters Oil prices fell on Monday, paring early gains as investors took profit following a surge in the previous session, albeit in the shadow of supply fear as the European Union prepares an import ban on Russian crude and with limited increase in OPEC output.

Brent crude futures were down 1.42, or 1.3, at 110.13 a barrel at 0653 GMT, while U.S. West Texas Intermediate WTI crude futures were 1.10, or 1.0, lower at 109.39 a barrel.

Both benchmarks, which jumped about 4 last Friday, earlier climbed by more than 1 a barrel, with WTI reaching its highest since March 28 at 111.71.

Investors scooped up profit after a sharp gain last Friday, said Naohiro Niimura, a partner at Market Risk Advisory.

Still, with a planned ban by the EU on Russian oil and slow increase in OPEC output, oil prices are expected to stay close to the current levels near 110 a barrel until they head lower late this year due to weakening global demand, he said.

The European Union aims to agree a phased embargo on Russian oil this month despite concerns about supply in eastern Europe, four diplomats and officials said on Friday, rejecting suggestions of a delay or watering down proposals.

Last week, Moscow slapped sanctions on several European energy companies, causing worries…