Ukrainian attacks on Russia increase risks in the oil market
25 August 08:59
Oil prices rose on Monday following a Ukrainian drone attack on Russia the day before. This increased market concerns about possible disruptions in the supply of Russian oil, while expectations of lower interest rates in the United States have boosted the outlook for global growth and fuel demand, "Komersant Ukrainian" reports citing Reuters.
Futures for Brent crude rose 3 cents, or 0.04%, to $67.76 at 05:42 Kyiv time, while futures for West Texas Intermediate (WTI) added 7 cents, or 0.11%, to $63.73.
Ukrainian attacks on Russia
Ukraine launched another drone attack on Russian targets on Sunday. According to Reuters, citing Russian officials, this led to a sharp decline in reactor power at one of Russia’s largest nuclear power plants, Kursk, and caused a huge fire at the Ust-Luga fuel export terminal.
In addition, the fire at Russia’s Novoshakhtyn oil refinery, caused by a Ukrainian drone attack, continued for a fourth day on Sunday, the region’s acting governor said.
The refinery sells fuel primarily for export and has an annual capacity of 5 million metric tons of oil, or about 100,000 barrels per day.
“Given the success that Ukraine is having in hitting Russian oil infrastructure… the risks to crude oil are shifting upwards,”
– said IG market analyst Tony Sycamore.
Meanwhile, US Vice President J.D. Vance said on Sunday that Russia has made “significant concessions” on a negotiated settlement in its war with Ukraine.
“They recognized that they could not install a puppet regime in Kyiv. This, of course, was the main demand at the beginning. And, importantly, they recognized that there would be some security guarantee for the territorial integrity of Ukraine,”
– Vance said in the NBC program “Meet the Press with Kristen Welker”.
However, U.S. President Donald Trump also renewed threats on Friday, saying he would impose sanctions on Russia if there is no progress in a peaceful settlement in Ukraine within two weeks.
Fed encourages risk-taking
Investors’ appetite for risk improved after Federal Reserve Chairman Jerome Powell signaled on Friday that interest rates could be cut at the US central bank’s meeting next month.
