Oil Prices Climb as Dollar Weakens, Russian Supply Concerns mount
LONDON/SINGAPORE – Oil prices rose Monday, buoyed by a weakening U.S.dollar and concerns over disruptions to russian oil supplies amid escalating conflict in Ukraine.Brent crude was up 80 cents, or 1.2%, at $68.28 a barrel at 1335 GMT, while U.S. West Texas Intermediate crude also rose 80 cents, or 1.3%,to $64.81. Trading volume was expected to be lower due to a U.S.public holiday.
Brent and WTI crude both experienced their first monthly declines in four months in August, falling by 6% or more following increased oil output from the OPEC+ producer group.
Analysts point to a complex interplay of factors influencing the market.”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.
Concerns about Russian oil flows are heightened, with weekly shipments from Russian ports dropping to a four-week low of 2.72 million barrels per day (bpd), according to tanker tracker data cited by ANZ analysts.Simultaneously, Ukraine has vowed to retaliate for recent Russian drone attacks on its power facilities with increased strikes inside Russia, intensifying the conflict and possibly disrupting energy infrastructure and Russian oil exports.Looking ahead, HSBC analysts predict a surplus of 1.6 million barrels per day in the fourth quarter of 2025 and the first quarter of 2026 as oil inventories are expected to rise following the summer season.
The upcoming U.S. labor market report this week is also expected to influence investor sentiment, potentially impacting expectations for near-term interest rate cuts and influencing appetite for riskier assets like commodities. The dollar was near a five-week low monday, making oil less expensive for buyers using other currencies.
Regional summits involving Chinese President Xi Jinping, Russian counterpart Vladimir Putin, and Indian Prime Minister Narendra Modi, and also the upcoming OPEC+ meeting on September 7, are also being closely watched by investors.
(Reporting by Seher Dareen in London and Florence Tan in Singapore; Editing by David Goodman and Tomasz Janowski)