Oil prices edged up on Monday as worries about rising output and the impact on demand from U.S. tariffs offset supply disruptions stemming from intensified Russia-Ukraine airstrikes and pressure from a weaker dollar.
Brent crude was up 31 cents, or 0.46%, at $67.79 a barrel by 0823 GMT. U.S. West Texas Intermediate crude slipped by 32 cents, or 0.5%, to $64.33. Trading is expected to be muted because of a U.S. public holiday.
Brent and WTI crude registered their first monthly declines in four months in August, losing 6% or more on increased supply from the OPEC+ producer group.
“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.
Investors were focused on Beijing, where Chinese President Xi Jinping, Russian counterpart Vladimir Putin and Indian Prime Minister Narendra Modi are attending a regional summit. Also on the radar was OPEC+ meeting on September 7, Hansen added.
Markets remain concerned about Russian oil flows, with weekly shipments from its ports dropping to a four-week low of 2.72 million barrels per day (bpd), according to tanker tracker data cited by ANZ analysts.
Ukrainian President Volodymyr Zelenskiy vowed on Sunday to retaliate with more strikes deep inside Russia after Russian drone attacks on power facilities in northern and southern Ukraine. Both countries have intensified airstrikes in recent weeks, targeting energy infrastructure and disrupting Russian oil exports.
A Reuters poll on Friday showed that oil prices are unlikely to gain much from current levels this year, as rising output from top producers adds to the risk of a surplus and U.S. tariff threats weigh on demand growth.
U.S. crude oil production hit a record high in June, rising by 133,000 bpd to 13.58 million bpd, Energy Information Administration data showed on Friday.
A U.S. labour market report this week will give a read on the economy’s health and test investor confidence that interest rate cuts are coming soon, a view that has strengthened appetite for riskier assets such as commodities.
Ahead of the data, the dollar hit a five-week low on Monday, making oil less expensive for buyers using other currencies.
Spurce: Reuters