Oil settles higher as investors assess attacks on Russian energy facilities
Oil prices settled higher Monday as investors assessed the impact of Ukrainian drone attacks on Russian refineries and of U.S. President Donald Trump pressing NATO nations to halt Russian oil purchases.
Brent crude futures settled up 45 cents, or 0.67%, at $67.44 a barrel while U.S. West Texas Intermediate crude settled 61 cents higher, up 0.97%, at $63.30 a barrel.
Attacks on Russian oil infrastructure and mounting pressure from Trump on buyers of Russian crude were boosting oil prices on Monday, said Phil Flynn, senior analyst with Price Futures Group.
"Behind the scenes there are a lot of concerns around heavy oil and tight diesel supplies, keeping the market supported," Flynn added.
One of Russia’s largest oil refineries, in the northwestern town of Kirishi, has halted a key processing unit following a Ukrainian drone attack over the weekend, two industry sources said on Monday.
Both crude contracts gained more than 1% last week as Ukraine stepped up attacks on Russian oil infrastructure, including the largest oil exporting terminal, Primorsk.
Primorsk has a capacity to load about 1 million barrels per day of crude, while the Kirishi refinery processes about 355,000 bpd of Russian crude, equal to 6.4% of the country’s total.
Trump said on Saturday that the U.S. was prepared to impose fresh energy sanctions on Russia, but only if all NATO nations ceased purchasing Russian oil and implemented similar measures.
Oil also received some support from solid refinery demand in China last month and a decline in U.S. crude inventories, while weaker economic data from China weighed on prices, UBS analyst Giovanni Staunovo said.
Investors are awaiting the interest rate decision by the U.S. Federal Reserve at its September 16-17 meeting, at which the bank is expected to ease monetary policy. Lower borrowing costs could boost fuel demand.
Source: Reuters
