Oil Firm as Russia & Fed on the Radar
Oil prices rose on Monday, extending last week's gains amid concerns about Russian supply disruptions and focus on the Fed meeting. At 5:00 AM ET (9:00 AM GMT), Brent for November delivery rose 0.3% to $67.20/barrel, while WTI gained 0.4% to $62.94/barrel. Ukrainian drone attacks on Moscow's energy infrastructure—including the port of Primorsk (its largest export terminal) and the Kirishinefteorgsintez refinery—added to the supply risk premium.
Analysts noted that operations at Primorsk were disrupted, and several pumping stations leading to Ust-Luga were also reportedly targeted. This raises the potential for a reduction in Russian supply to key markets like India and China. Meanwhile, Western pressure on Moscow continues, while peace talks have stalled—factors that could maintain supply uncertainty.
On the demand side, Chinese data showed factory output and retail sales weakened to their lowest pace since last year in August. However, refineries processed nearly 15 million bpd (+7.6% yoy) on the back of strong imports and higher domestic production, with oil demand seen rising to 14.53 million bpd (+4.9% yoy). This combination of weak data and high throughput keeps the demand outlook for China mixed, but not diminishing.
The market is also anticipating a Fed rate cut this week. A weaker dollar, with a -25 bps chance (≈96.4%)—with a 3.6% chance of -50 bps—is providing support for USD-denominated commodities. Lower interest rates typically support economic activity and oil demand, although concerns about weakening US fuel consumption remain.
Key points (in summary)
Brent $67.20, WTI $62.94: continuing last week's gains.
Supply risks: attacks on Primorsk & Kirishinefteorgsintez, potential disruptions to India/China.
China: Weak economic data, but refinery throughput & demand appear to be up yoy.
The Fed: High probability of -25 bps → USD weakens → positive bias for oil; however, US fuel demand remains a concern. (ayu)
Source: Newsmaker.id
