Oil prices edged higher as traders weigh supply risks
Oil prices rose on Monday (August 25th) as traders weighed concerns that Russian supplies could be disrupted by tighter U.S. sanctions and a Ukrainian attack targeting Russian energy infrastructure.
Brent crude futures rose 40 cents, or 0.6%, to $68.13 at 12:00 GMT, and West Texas Intermediate (WTI) crude futures rose 44 cents, or 0.7%, to $64.10. "The market is somewhat concerned that these peace negotiations will not bear fruit," said Ole Hansen, head of commodity strategy at Saxo Bank.
"The market expects supply to exceed demand in the autumn months, but in the short term, it is being hampered by potential geopolitical disruptions." U.S. President Donald Trump warned again on Friday that he would impose sanctions on Russia if there is no progress towards a peace settlement in Ukraine within two weeks.
He also said he might impose high tariffs on India for purchases of Russian oil.
Over the weekend, US Vice President J.D. Vance said Russia had made "significant concessions" toward a negotiated settlement in the 3.5-year-old war. Ukraine, which has repeatedly targeted Russian energy infrastructure during the war, launched a drone attack on Sunday that sparked a massive fire at the Ust-Luga fuel export terminal, Russian officials said.
The fire at Russia's Novoshakhtinsk refinery, caused by a Ukrainian drone attack, had been burning for four days on Sunday, the region's acting governor said. The refinery sells fuel primarily for export and has an annual capacity of 5 million metric tons of oil, or about 100,000 barrels per day.
Concerns about Russian supply disruptions eased after OPEC+ scrapped a series of production cuts, which added millions of barrels to the market, said Saxo Bank's Hansen. The eight-member oil exporting group is scheduled to meet on September 7 to agree on the next production increase.
Investor risk appetite improved after Federal Reserve Chairman Jerome Powell signaled on Friday that an interest rate cut is likely at the US central bank's September meeting. However, despite this, both benchmark oil prices appear to be less enthusiastic, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, adding that the market appears increasingly convinced that Trump's tariffs will impact economic growth. (alg)
Source: Reuters
