LONDON: Oil prices climbed on Monday as traders weighed concerns that Russian supply could be disrupted by more US sanctions and Ukrainian attacks targeting energy infrastructure in Russia.
Brent crude futures rose 29 cents, or 0.4%, to $68.02 at 08:39 GMT and West Texas Intermediate (WTI) crude futures gained 36 cents, or 0.6%, to $64.02.
“The market is somewhat concerned that these peace negotiations are going nowhere”, said Ole Hansen, head of commodity strategy at Saxo Bank. “The market is looking for supply to exceed demand in the autumn months, but in the short term that’s being challenged by a potential geopolitical disruption”. US President Donald Trump warned again on Friday that he would impose sanctions on Russia if there was no progress towards a peaceful settlement in Ukraine in two weeks. He has also said he may hit India with tariffs over its Russian oil purchases.
US Vice President JD Vance said Russia had made “significant concessions” towards a negotiated settlement in the three-and-a-half year war. Ukraine has repeatedly targeted Russian energy infrastructure, with a drone attack on Sunday sparking a blaze at the Ust-Luga fuel export terminal. A fire at Russia’s Novoshakhtinsk refinery, also caused by a drone strike, was still burning on Sunday.
Softening concerns about Russian supply disruptions are OPEC+’s reversal of production cuts, which are adding millions of barrels to the market. Eight members of the oil exporters’ group are scheduled to meet on September 7 to approve another boost.
Investor sentiment improved after Federal Reserve Chair Jerome Powell signalled a possible interest rate cut at the US central bank’s September meeting. Still, analysts said oil prices appear to lack momentum as markets increasingly factor in the economic risks of Trump’s tariff threats. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
