Oil prices rose 1 per cent on Monday, driven by worries over supply disruptions linked to intensified Russia-Ukraine airstrikes and a weaker dollar.
- Oil prices rose 1 per cent on Monday, driven by worries over supply disruptions linked to intensified Russia-Ukraine airstrikes and a weaker dollar.
- In August, both Brent and WTI crude experienced their first monthly declines in four months, dropping over 6 per cent as increased supply from the OPEC+ producer group weighed heavily on prices.
- As the data approaches, the dollar remains close to a five-week low, which makes oil less expensive for buyers using other currencies.
Brent crude climbed 62 cents, or 0.9 per cent, reaching $68.10 a barrel by 1019 GMT, while US West Texas Intermediate crude increased by 65 cents, or 1 per cent, to $64.66. However, trading activity is expected to be subdued due to a US public holiday.
In August, both Brent and WTI crude experienced their first monthly declines in four months, dropping over 6 per cent as increased supply from the OPEC+ producer group weighed heavily on prices.
“Crude fell in August and has started September with no clear direction within established ranges as fears of a fourth-quarter supply glut are offset by geopolitical tensions,” explained Ole Hansen, head of commodity strategy at Saxo Bank.
Attention is turned towards Beijing, where a significant regional summit is taking place involving Chinese President Xi Jinping, Russian President Vladimir Putin, and Indian Prime Minister Narendra Modi. The upcoming OPEC+ meeting scheduled for September 7 is also on investors’ radar.
Concerns regarding Russian oil flows persist, as weekly shipments from its ports have plummeted to a four-week low of 2.72 million barrels per day (bpd), according to tanker tracker data reported by ANZ analysts.
On the Ukrainian front, President Volodymyr Zelenskiy has vowed to retaliate with further strikes deep inside Russia following drone attacks on power facilities in northern and southern Ukraine. The escalation in airstrikes from both countries has targeted energy infrastructure, further disrupting Russian oil exports.
A recent Reuters poll indicated that oil prices are unlikely to see significant gains from their current levels this year, as rising output from leading producers contributes to the risk of a surplus, compounded by US tariff threats that could hinder demand growth.
Looking ahead, analysts from HSBC predict that oil inventories will likely rise in the last quarter of 2025 and the first quarter of 2026, with an anticipated surplus of 1.6 million barrels per day in the fourth quarter.
In the broader economic context, the US labour market report due this week will provide insights into the economy’s health and test investor confidence regarding potential interest rate cuts. This perspective has bolstered interest in riskier assets like commodities.
As the data approaches, the dollar remains close to a five-week low, which makes oil less expensive for buyers using other currencies.
