Oil Prices Rise After Ukraine Attacks On Russian Energy Infrastructure

Benchmark Brent crude prices rose 8 cents to $67.81 per share, while West Texas Intermediate (WTI) crude prices advanced 10 cents to $63.76 per share at 3.00 a.m. ET.

Oil prices edged up early on Monday after Ukraine attacked Russian energy facilities amid fading hopes and a quick resolution to the war between the two countries.

Benchmark Brent crude prices gained 8 cents at $67.81 per share, while West Texas Intermediate (WTI) crude prices advanced 10 cents to $63.76 per share at 3.00 a.m. ET. Retail sentiment on Stocktwits about the United States Oil Fund (USO) was in the ‘bearish’ territory.

According to a Reuters report, Ukraine launched a drone attack on Russia on Sunday, which led to a sharp fall in the capacity of a reactor at one of Russia's biggest nuclear power plants and led to a fire at the Ust-Luga fuel export terminal.

Separately, a blaze at Russia's Novoshakhtinsk refinery continued for the fourth day on Sunday, caused by a Ukrainian drone attack. The refinery has a daily capacity of 100,000 barrels.

Both benchmark crude prices had already advanced last week on a larger-than-expected decline in U.S. oil inventories, and a meeting between Russian President Vladimir Putin and his U.S. counterpart Donald Trump did not yield any significant results.

Separately, Federal Reserve Chair Jerome Powell hinted at a possible rate cut in January, which slightly brightened the outlook for oil demand. However, underlying oil demand still remains subdued due to a rise in supply.  

“For now, we continue to view the physical fundamental surplus in the market as bearish, with the upside dependent on geopolitical threats to supply,” Tim Evans, of Evans on Energy, said.

Evans noted that OPEC+ production is still lagging behind targets, which suggests even higher supplies in the future, despite the group maintaining current output levels.

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