Oil prices edged higher in Asian trading on Monday, continuing the modest gains seen last week as investors weighed the impact of potential disruptions to Russian oil supplies following Ukrainian drone attacks on Moscow’s energy infrastructure.
Market focus this week is also firmly on the U.S. Federal Reserve, which is widely expected to cut interest rates in response to softening U.S. fuel demand. By 22:15 ET (02:15 GMT), Brent crude for November delivery had risen 0.4% to $67.26 a barrel, while West Texas Intermediate (WTI) futures were up 0.5% at $62.72 a barrel.
The risk of supply disruptions from Russia remains a key factor supporting prices. Last week, oil climbed about 1% after Ukraine intensified strikes on Russian energy assets, including the Primorsk export terminal and the Kirishinefteorgsintez refinery. Analysts note that these attacks could temporarily remove significant volumes of Russian oil from global markets, particularly affecting major buyers such as India and China.
Efforts by the U.S. to de-escalate the Russia-Ukraine conflict remain ongoing, though Moscow indicated on Friday that ceasefire talks with Kyiv had stalled. At the same time, Washington has been pressing G7 nations for higher trade tariffs on Chinese and Indian imports, following the imposition of a 50% tariff on Indian purchases of Russian oil in late August. Additional restrictions could further tighten global supply if the conflict continues.
Support for oil prices has also come from a softer U.S. dollar. The greenback weakened ahead of the anticipated Federal Reserve rate cut, which follows a series of weak labor market readings and mixed inflation data. According to CME FedWatch, the market currently sees a 96.4% probability of a 25 basis-point rate reduction and a 3.6% chance of a 50-bps cut. Lower interest rates generally stimulate economic activity, which in turn can support fuel demand in the coming months.
The softer dollar has also boosted commodities priced in U.S. currency, helping to lift oil and other global commodity prices. With geopolitical risks and monetary policy expectations driving market sentiment, oil traders are closely monitoring developments in both Russia-Ukraine tensions and the U.S. Federal Reserve’s decisions.
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