 |
A pumpjack is in operation at Vermilion Energy's site in Trigueres. |
Oil prices rose on Monday following an escalation in the Russia-Ukraine conflict over the weekend, although concerns about demand in China, the world’s second-largest oil consumer.
By 0130 GMT, Brent crude futures were up by 20 cents (0.3%) at $71.23 per barrel, while U.S. West Texas Intermediate crude futures rose 9 cents (0.1%) to $67.11 per barrel.
In a notable shift in policy, the Biden administration has allowed Ukraine to use U.S.-made weapons for deep strikes into Russian territory, according to U.S. officials. The Kremlin has yet to respond, though it previously warned that loosening restrictions on Ukrainian weapon use would be seen as a serious escalation.
"Biden allowing Ukraine to strike Russian forces around Kursk with long-range missiles might lead to a geopolitical boost in oil prices, marking a notable escalation," said IG Markets analyst Tony Sycamore.
Over the weekend, Russia launched its largest airstrike on Ukraine in three months, inflicting extensive damage on Ukraine’s power infrastructure. Meanwhile, in Russia, at least three refineries have either halted processing or reduced operations due to export restrictions, rising crude costs, and high borrowing rates, according to industry sources.
Brent and WTI fell by over 3% last week, pressured by weak economic data from China and the International Energy Agency’s forecast that global oil supply could outstrip demand by over 1 million barrels per day by 2025, even with OPEC+ cuts. China's refinery output in October dropped 4.6% compared to last year, as government data showed factory output growth slowing.
Investors are also uncertain about the pace and extent of potential interest rate cuts by the U.S. Federal Reserve, adding to market volatility. In the U.S., active oil rigs fell by one last week to 478, marking the lowest count since July, according to Baker Hughes.
0 Comments