Oil prices ticked higher on Monday as escalating Ukrainian drone strikes on Russian energy sites raised fears of potential supply disruptions. At the same time, expectations of a U.S. interest rate cut improved the outlook for global growth and fuel demand.
Brent crude futures inched up 3 cents, or 0.04%, to $67.76 per barrel by 03:42 GMT, while West Texas Intermediate (WTI) crude gained 7 cents, or 0.11%, to $63.73.
Ukraine intensified its attacks over the weekend, targeting Russia’s energy infrastructure. A drone strike reduced capacity at one of Russia’s largest nuclear plants and sparked a massive fire at the Ust-Luga fuel export terminal. In addition, the Novoshakhtinsk refinery fire—caused by another drone attack—continued burning for a fourth straight day. The refinery, with an annual capacity of 5 million metric tons or around 100,000 barrels per day, mainly produces fuel for export.
“Given Ukraine’s success in striking Russian oil facilities, the risks for crude prices are shifting to the upside,” said IG market analyst Tony Sycamore.
On the political front, U.S. Vice President JD Vance stated Sunday that Russia has made “significant concessions” in negotiations, acknowledging that it cannot install a puppet regime in Kyiv and will need to guarantee Ukraine’s territorial integrity. However, President Donald Trump reiterated on Friday that new sanctions could be imposed on Russia within two weeks if there is no progress toward a peace settlement.
Investor sentiment was also lifted after Federal Reserve Chair Jerome Powell signaled on Friday that the U.S. central bank could cut rates at its next meeting. Analysts at ANZ noted that the combination of “risk-on” sentiment and renewed supply concerns in energy and metals boosted appetite across commodities.
