Oil prices rose on Monday (September 15th) as investors assessed the impact of Ukrainian drone attacks on Russian refineries and U.S. President Donald Trump's call for NATO countries to halt purchases of Russian oil.
Brent crude rose 41 cents, or 0.61%, to $67.40 a barrel at 11:43 a.m. EDT (15:43 GMT), while U.S. West Texas Intermediate crude was at $63.25 a barrel, up 56 cents, or 0.89%.
The attack on Russian oil infrastructure and increased pressure from Trump on buyers of Russian crude boosted oil prices on Monday, said Phil Flynn, senior analyst at Price Futures Group.
"Behind the scenes, there are a lot of concerns around heavy oil and tight diesel supplies, which is keeping the market supported," Flynn added. Ukraine launched a massive attack with at least 361 drones targeting Russia overnight, sparking a brief fire at the sprawling Kirishi oil refinery in northwest Russia, Russian officials said on Sunday.
Both crude oil contracts rose more than 1% last week as Ukraine stepped up attacks on Russian oil infrastructure, including its largest oil export terminal, Primorsk. Primorsk has the capacity to load about 1 million barrels of crude per day, while the Kirishi refinery processes about 355,000 barrels per day of Russian crude, equivalent to 6.4% of the country's total.
Trump said on Saturday that the US is ready to impose new energy sanctions on Russia, but only if all NATO countries stop buying Russian oil and implement similar measures.
Oil also received some support from strong refinery demand in China last month and a decline in US crude inventories, while weaker economic data from China weighed on prices, said UBS analyst Giovanni Staunovo.
Investors are awaiting the US Federal Reserve's interest rate decision at its September 16-17 meeting, where the bank is expected to ease monetary policy. Lower borrowing costs could boost fuel demand.
"The market is starting to price in the possibility of more aggressive Fed rate cuts, which would put downward pressure on the U.S. dollar and boost oil prices," said Flynn of Price Futures Group. The U.S. dollar weakened against other currencies on Monday, which could boost crude oil demand as a weaker dollar makes oil cheaper for holders of other currencies. (alg)
Source: Reuters
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