Beijing/Singapore — Oil prices edged higher on Monday after Ukraine stepped up attacks on Russia, fanning concern Russian oil supply could be disrupted, while the expectation of a cut in US interest rates buoyed the outlook for global growth and fuel demand.
Brent crude futures rose 3c, or 0.04%, to $67.76 at 3.42am GMT, and West Texas Intermediate (WTI) crude futures gained 7c, or 0.11%, to $63.73.
Ukraine launched a drone attack on Russia on Sunday, which forced a sharp fall in the capacity of a reactor at one of Russia’s biggest nuclear power plants and sparked a huge blaze at the Ust-Luga fuel export terminal, Russian officials said.
In addition, a fire at Russia’s Novoshakhtinsk refinery, caused by a Ukrainian drone attack, was burning for the fourth day on Sunday, the acting governor of the region said.
The refinery sells fuel mainly for export and has an annual capacity of 5-million metric tonnes of oil, or about 100,000 barrels a day.
“Given the success that Ukraine is having with its targeting of Russian oil infrastructure ... the risks for crude oil are shifting to the topside,” IG market analyst Tony Sycamore said.
Meanwhile, US vice-president JD Vance said Russia had made “significant concessions” towards a negotiated settlement in its war with Ukraine on Sunday.
“They’ve recognised that they’re not going to be able to install a puppet regime in Kyiv. That was, of course, a major demand at the beginning. And, importantly, they’ve acknowledged that there is going to be some security guarantee for the territorial integrity of Ukraine,” Vance said on NBC’s Meet the Press with Kristen Welker programme.
However, US President Donald Trump also renewed threats on Friday that he would impose sanctions on Russia if there was no progress towards a peaceful settlement in Ukraine in two weeks.
Investors’ risk appetite has improved after Federal Reserve chair Jerome Powell on Friday signalled a possible interest rate cut at the US central bank’s meeting next month.
“A risk-on tone across markets boosted investor appetite across the commodities complex, aided by renewed supply side issues across energy and metals,” ANZ analysts said in a note.
Reuters
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