Oil prices fluctuate due to shelling of Ukraine and US trade threats
1 September 08:46
Oil is trading in a narrow range on Monday, as concerns about production growth and the impact of US tariffs on demand are offset by supply disruptions due to Russia’s intensified shelling of Ukraine. This was reported by "Komersant Ukrainian" with reference to Reuters.
According to OilPrice.com, Brent crude oil fell 25 cents (0.37%) to $67.23 per barrel as of 08:36 Kyiv time, while US WTI was trading at $63.79 per barrel, down 22 cents (0.34%). Trading is likely to be limited due to the US holiday.
Ukraine vs Russia
Ukraine’s President Volodymyr Zelenskiy on Sunday vowed to respond by ordering new strikes deep into Russia after Russian drone attacks on energy facilities in Ukraine’s northern and southern regions. Both countries have stepped up air strikes in recent weeks, attacking energy infrastructure and disrupting Russian oil exports.
Markets remain concerned about Russian oil flows. According to tanker trackers cited by ANZ analysts, weekly shipments from Russian ports fell to a four-week low of 2.72 million barrels per day.
However, Russian oil exports to India will increase in September, traders say, despite secondary duties imposed by the US on New Delhi for purchasing oil from Moscow.
“Modi’s meeting with Putin in China will be closely monitored, especially in light of US pressure,”
– said Michael McCarthy, CEO of Moomoo Australia, referring to the Indian and Russian presidents attending the Shanghai Cooperation Organization meeting in China.
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Asia and OPEC
The week began with a slew of production and export data from China, Japan, and South Korea, some of the world’s largest crude oil importers.
Industrial activity in China unexpectedly increased in August, but weakened in other Asian economies as companies began to feel the negative impact of US tariffs, clouding the prospects for the region’s fragile recovery.
Brent and WTI recorded their first drop in four months in August, falling 6% or more on concerns about OPEC supply.
Investors are watching the September 7 meeting between OPEC members for additional signals on supply.
Forecasts and expectations
A Reuters poll on Friday showed that oil prices are unlikely to rise significantly from current levels this year as rising production from major producers adds to the risk of a glut and threats of US tariffs weigh on demand growth.
Meanwhile, US crude oil production reached a record high in June, rising by 133 thousand barrels per day to 13.58 million barrels per day.
This week’s US labor market report will provide a key assessment of the state of the economy and test investors’ confidence that interest rate cuts are on the way – a view that has increased their appetite for risky assets such as commodities.
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