Oil is no longer rising in price despite Ukrainian strikes on Russian refineries
17 September 09:06
On Wednesday, oil prices declined slightly after rising by more than 1% in the previous trading session. However, despite the decline, geopolitical tensions continue to support quotes, and traders are awaiting the decision of the US Federal Reserve to cut interest rates. This is reported by "Komersant Ukrainian" with reference to Reuters.
According to OilPrice.com, Brent crude oil futures fell 13 cents or 0.19% to $68.34 per barrel as of 08:56 Kyiv time. US West Texas Intermediate futures fell 11 cents or 0.17% to $64.41 per barrel.
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“Geopolitical tensions” from Ukraine
In the previous trading session, both benchmark crude oil grades closed up more than 1% on concerns about possible disruptions in Russian supplies. This rise was caused by “an escalating geopolitical situation,” according to Reuters, referring to Ukrainian strikes on Russian refineries.
According to the agency, three sources in the oil industry said that Russia’s pipeline monopoly Transneft has warned producers of the possible need to cut production. The reason was attacks by Ukrainian drones on critical export ports and refineries.
“The market is closely monitoring geopolitical instability and potential disruptions in Russian supplies. Market nervousness is still keeping prices elevated,”
– commented Emril Jamil, senior oil market analyst at London Stock Exchange Group.
The Fed factor
Investors are also waiting for the results of the US Federal Reserve meeting on September 16-17. The US central bank is expected to cut interest rates by 25 basis points on Wednesday, which should stimulate the economy and increase demand for fuel.
“The markets are betting on a 25 basis point Fed rate cut, which traders believe could lower borrowing costs and boost fuel demand,”
– said Priyanka Sachdeva, senior market analyst at Phillip Nova.
She also noted that growth is supported by geopolitical tensions and supply risks from conflicts. At the same time, the analyst expressed caution about the prospects:
“Global oversupply for the rest of 2025 looks almost inevitable as OPEC increases production.”
According to IG analyst Tony Sicamore, the market will focus on three aspects of the Fed meeting
- how many Fed members will support Stephen Miran in voting for a 50 basis point cut;
- whether the forecast will indicate two or three 25 basis point cuts;
- as well as the tone of Fed Chairman Powell during the press conference.
A positive signal for the market was Tuesday’s data on the decline in US crude oil and gasoline stocks last week, while distillate stocks rose. According to the American Petroleum Institute, crude oil stocks fell by 3.42 million barrels, gasoline stocks fell by 691 thousand barrels, while distillate stocks rose by 1.91 million barrels. The market expects confirmation of these data from the US Energy Information Administration on Wednesday.
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