- Russian drones knock out Ukraine power facilities
- Zelenskiy vows more strikes deep inside Russia
- OPEC+ due to meet on September 7
(Reuters) – Oil prices rose by more than 1% on Monday on concern over supply disruptions stemming from intensified Russia-Ukraine airstrikes as well as a weaker dollar.
Brent crude was up 83 cents, or 1.2%, at $68.31 a barrel by 1215 GMT. U.S. West Texas Intermediate crude also rose 83 cents, or 1.3%, to $64.84. Trading is expected to be muted because of a U.S. public holiday.
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Brent and WTI crude registered their first monthly declines in four months in August, losing 6% or more on increased supply from the OPEC+ producer group.
“Crude fell in August and has started September with no clear direction within established ranges as fears of a fourth-quarter supply glut are offset by geopolitical tensions,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Investors were focused on Beijing, where Chinese President Xi Jinping, Russian counterpart Vladimir Putin and Indian Prime Minister Narendra Modi are attending a regional summit. Also on the radar was OPEC+ meeting on September 7, Hansen added.
Markets remain concerned about Russian oil flows, with weekly shipments from its ports dropping to a four-week low of 2.72 million barrels per day (bpd), according to tanker tracker data cited by ANZ analysts.
Ukrainian President Volodymyr Zelenskiy vowed on Sunday to retaliate with more strikes deep inside Russia after Russian drone attacks on power facilities in northern and southern Ukraine. Both countries have intensified airstrikes in recent weeks, targeting energy infrastructure and disrupting Russian oil exports.
A Reuters poll on Friday showed that oil prices are unlikely to gain much from current levels this year, as rising output from top producers adds to the risk of a surplus and U.S. tariff threats weigh on demand growth.
Coming out of the summer season, oil inventories should rise in the last quarter of 2025 and the first quarter of 2026, HSBC analysts said in a note, with a surplus of 1.6 million barrels per day in the fourth quarter.
Elsewhere, the U.S. labour market report this week will give a read on the economy’s health and test investor confidence that interest rate cuts are coming soon, a view that has strengthened appetite for riskier assets such as commodities.
Ahead of the data, the dollar was close to a five-week low on Monday, making oil less expensive for buyers using other currencies.
Reporting by Seher Dareen in London and Florence Tan in Singapore Editing by David Goodman
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