Oil dropped following signs that activity had resumed at the key Russian port of Novorossiysk on the Black Sea, after a Ukrainian strike last week led to some damage and a suspension of operations.

Brent slipped below $64 a barrel after closing more than 2% higher on Friday following the attack, and West Texas Intermediate fell toward $59. Two tankers moored on Sunday at Novorossiysk, indicating operational activity at the terminals, while Reuters reported that crude loading had resumed.

The attack on the Russian port, along with Iran's seizure of a tanker near the Strait of Hormuz, injected fresh geopolitical premium into prices and lifted oil to a modest weekly gain. Still, the market is facing a large surplus as OPEC+ and producers from outside of the group ramp up output, capping price gains.

Globally, refinery margins have surged as relentless attacks on Russia's energy infrastructure, outages at key plants in Asia and Africa, and permanent closures across Europe and the US cut diesel and gasoline supply from the market.

Meanwhile, Serbia is willing to pay a premium to regain control of the country's only oil refiner NIS AD as it tries to unshackle the Russian-owned company from US sanctions, President Aleksandar Vucic said on Sunday. NIS's owners are in talks with investors from Asia and Europe who could potentially take it over.

Prices:

Brent for January settlement fell 0.9% to $63.78 a barrel at 8:12 a.m. in Singapore.

WTI for December delivery declined 1% to $59.47 a barrel.

Source: Bloomberg