Oil Prices Rise As Russia-Ukraine War Threatens Supply
Oil prices held steady at $68.04 entering the Asian session on Tuesday (August 26th), after rising about 2% on Monday, extending last week's gains, as traders anticipated tighter US sanctions on Russian oil and a Ukrainian attack on Russian energy infrastructure that could disrupt supply.
Brent futures closed up $1.07, or 1.58%, at $68.80, while West Texas Intermediate (WTI) futures rose $1.14, or 1.79%, to $64.80.
The US is working to broker a peace deal between Ukraine and Russia to end the 3.5-year war. "There's a sense that the peace talks are going slowly," said Phil Flynn, senior analyst at Price Futures Group. "There could be sanctions against Russia if these talks don't go well."
US President Donald Trump reiterated on Friday that he would impose sanctions on Russia if there is no progress within two weeks toward a peace settlement in Ukraine. He also suggested he could impose harsh tariffs on India over its purchases of Russian oil. Last weekend, US Vice President J.D. Vance said Russia had made “significant concessions” toward a negotiated settlement.
Ukraine, which has stepped up attacks on Russian energy infrastructure, launched a drone attack on Sunday that sparked a massive fire at the Ust-Luga fuel export terminal, Russian officials said. A fire at Russia’s Novoshakhtinsk refinery, following the Ukrainian drone attack, continued burning for a fourth day on Sunday, according to the local acting governor. The refinery primarily exports products and has a capacity of 5 million tons per year, or about 100,000 barrels per day.
The market impact of potential Russian supply disruptions was offset by the reversal of a series of OPEC+ production cuts, which added millions of barrels to the market, said Ole Hansen, head of commodity strategy at Saxo Bank. The eight-member oil exporting group is scheduled to meet on September 7, when they are expected to agree on further increases. Investor risk appetite also improved after Federal Reserve Chairman Jerome Powell signaled the possibility of an interest rate cut at the US central bank’s September meeting on Friday.
However, both oil benchmarks appear to be lacking momentum, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, adding that the market is increasingly convinced that President Trump's tariffs will suppress economic growth, which in turn curbs fuel demand. (ayu)
Source: Newsmaker.id
