Oil prices fell after rising amid Russia-Ukraine war
26 August 08:40
Oil prices declined slightly on Tuesday after a sharp rise of almost 2% in the previous trading session. Traders are closely watching developments in the Russian-Ukrainian conflict due to the threat of fuel supply disruptions in the region, "Komersant Ukrainian" reported citing Reuters.
As of 06:48 Kiev time, the price of Brent crude fell by 32 cents (0.5%) to $68.48 per barrel. U.S. WTI crude also fell 33 cents (0.5%) to $64.47 a barrel.
Both futures hit their highest levels in more than two weeks on Monday.
“Risks to crude oil prices are tilted toward further upside, especially if the price holds above the $64-$65 resistance level.”
– iG analysts said in a commentary.
Russian energy infrastructure hits
The rise in oil prices on Monday was driven mainly by concerns over supply disruptions after Ukraine launched strikes on Russian energy infrastructure. Traders also expect U.S. sanctions against Russian oil to intensify.
The attacks disrupted Russian oil refining and exports and created gasoline shortages in parts of Russia. The strikes were in response to Moscow’s advance on the frontline and its shelling of Ukrainian gas and energy facilities.
Barclays said in a Monday note to clients that oil prices remain in a narrow range amid geopolitical volatility and relatively resilient fundamentals.
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Threat of new sanctions
US President Donald Trump renewed his threat to impose sanctions on Russia if progress is not made in peace talks over the next two weeks.
Traders will also be watching the impact of future U.S. tariffs against India for its continued purchases of Russian oil, said Ole Hansen, head of commodities strategy at Saxo Bank.
Indian exporters are bracing for disruption after the U.S. Department of Homeland Security confirmed that Washington will impose an additional 25% tariff on all Indian-origin goods from Wednesday.
This means Indian exports will face U.S. duties of up to 50%, one of the highest imposed by Washington after Trump announced additional tariffs as punishment for India’s increased purchases of Russian oil in early August.
Waiting for statistical data
Traders are awaiting data on U.S. oil inventories from the American Petroleum Institute (API) later today. Forecasts point to a decline in crude oil and gasoline inventories, but a rise in distillate stocks is possible.
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