Oil prices rose today as concerns about supply disruptions grew amid an escalation of the conflict between Russia and Ukraine.
The market is also weighing whether the upcoming U.S. jobs data will lead to interest rate cuts, reports Reuters.
Brent crude added 37 cents, or 0.54%, to $68.52 a barrel by 7:17 AM WAT, while U.S. West Texas Intermediate crude was at $65.02 a barrel, up $1.01, or 1.58%.
WTI futures did not settle on Monday due to the Labor Day holiday in the U.S.
This is as the U.S. labour data is due this week ahead of the Federal Reserve’s September meeting, which could strengthen the case for monetary easing after surprisingly weak U.S. payrolls data released in July.
On the supply side, recent Ukrainian drone attacks shut down facilities accounting for at least 17% of Russia’s oil-processing capacity, or 1.1 million barrels per day, according to Reuters’ calculations.
On Sunday, Ukraine’s President Volodymyr Zelenskiy said Ukraine plans new strikes deep into Russia after weeks of intensified attacks on Russian energy assets.
Three-and-a-half years into the war, Russia and Ukraine have both intensified airstrikes in recent weeks. Russia has targeted Ukraine’s energy and transport systems, while Ukraine has been attacking Russian oil refineries and pipelines.
China’s vision for “a new global order” could potentially add to geopolitical tensions. Chinese President Xi Jinping pressed his vision on Monday for a new global security and economic order that prioritises the “Global South”, in a direct challenge to the U.S., during a summit that included the leaders of Russia and India.
The country shipped 600,000 barrels of heavy crude by tanker yesterday.
China and India are the biggest buyers of crude oil from Russia, the world’s second-largest exporter. Trump has imposed additional tariffs on India over the purchases, but not on China.
Investors now await a meeting among members of the Organisation of the Petroleum Exporting Countries and their allies on September 7 for any clues on future production plans. The market expects OPEC+ to keep output unchanged for now, after having unwound supply cuts over the past half year.
That, combined with concerns about the economic impact of tariffs, has led oil supply to grow faster than demand, according to the IEA.
