SINGAPORE/NEW DELHI :Oil prices gained on Monday, supported by geopolitical tensions in Europe and the Middle East, although prospects of increased supply and concerns over trade tariffs on global fuel demand weighed on markets.
Brent crude futures rose 45 cents, or 0.67%, to $67.13 a barrel by 07:01 GMT, while US West Texas Intermediate (WTI) crude for October was at $63.15 a barrel, up 47 cents, or 0.75%. The October WTI contract expires on Monday; the more active November contract rose 43 cents, or 0.69%, to $62.83 a barrel.
“Reports over the weekend that Russia was threatening over the Polish border have reminded traders of ongoing risks to European energy security from the northeast”, said Michael McCarthy, CEO of investment platform Moomoo Australia and New Zealand.
Polish and allied aircraft were deployed on Saturday to ensure the safety of Polish airspace after Russia launched air strikes targeting western Ukraine near the border with Poland, the Nato-member country’s armed forces said. The deployment followed three Russian military jets violating Estonia’s airspace on Friday and a Russian plane entering neutral airspace over the Baltic Sea on Sunday, according to Germany’s air force. The United Nations Security Council is due to meet on Monday over Estonia’s accusations.
Meanwhile, Ukraine stepped up drone attacks on Russian energy infrastructure, while US President Donald Trump urged the European Union to halt Russian oil and gas purchases.
In the Middle East, four Western nations recognised a Palestinian state, prompting a furious response from Israel and adding to regional jitters.
Brent and WTI settled down more than 1% on Friday as worries about large supplies and declining demand outweighed expectations that the US Federal Reserve’s first interest-rate cut of the year would boost consumption.
Iraq increased oil exports following the gradual unwinding of voluntary production cuts under an OPEC+ agreement, the country’s state oil marketer SOMO said. Iraq’s oil exports averaged 3.38 million barrels per day in August, with September expected between 3.4 million and 3.45 million bpd.
“Rising inventories over the past six months confirm that supply has been outpacing demand”, said Tim Evans in the newsletter Evans on Energy. “Strategic reserves accumulated by China and the US have helped absorb the surplus, but added inventories still limit near-term upside for prices”. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
