Oil Prices Hold Steady as Rising Output Balances Russia Supply Concerns
Oil prices traded in a narrow range on Monday as fears of rising global output and U.S. tariff impacts on demand offset supply disruptions from escalating Russia-Ukraine airstrikes.
By 05:00 GMT, Brent crude slipped 30 cents, or 0.44%, to $67.18 per barrel, while U.S. West Texas Intermediate (WTI) fell 28 cents, or 0.44%, to $63.73. Trading volumes were muted due to a U.S. bank holiday.
Over the weekend, Ukrainian President Volodymyr Zelenskiy vowed more retaliatory strikes inside Russia following drone attacks on Ukraine’s power facilities. Both nations have intensified assaults in recent weeks, targeting energy infrastructure and affecting Russian oil exports.
Weekly shipments from Russian ports fell to a four-week low of 2.72 million barrels per day, according to tanker data cited by ANZ analysts. However, traders said Russian crude exports to India are expected to increase in September, despite secondary U.S. tariffs imposed on New Delhi for buying Moscow’s oil.
Market attention is also turning to a meeting between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin in China for the Shanghai Cooperation Organisation summit, amid ongoing U.S. pressure on India.
A recent Reuters poll indicated that oil prices may struggle to gain momentum this year, as rising supply from top producers raises the risk of oversupply while U.S. tariffs weigh on demand.
Data from Asia’s top crude importers offered mixed signals. Factory activity in China expanded unexpectedly in August, while Japan and South Korea showed signs of weakness as U.S. tariffs weighed on exports, clouding the regional recovery.
Both Brent and WTI crude recorded their first monthly decline in four months in August, down more than 6% amid OPEC+ supply concerns. Investors now await the September 7 OPEC+ meeting for further direction on output levels.
Meanwhile, U.S. crude oil production hit a record high in June, rising 133,000 barrels per day to 13.58 million bpd, according to the Energy Information Administration (EIA).
Looking ahead, investors are closely watching this week’s U.S. labor market report, which could provide crucial signals on economic health and influence expectations for potential Fed rate cuts, a key driver of risk appetite in commodities.
