KEY POINTS
- Brent crude rose 1.2% to $68.28; WTI gained 1.3% to $64.81.
- Russian oil exports fell to a four-week low as Ukraine vowed more strikes.
- OPEC+ meets Sept. 7, while U.S. jobs data will test economic sentiment.
Oil prices rose on Monday, lifted by a weaker U.S. dollar and mounting supply concerns tied to intensifying Russian and Ukrainian airstrikes on energy infrastructure.
Brent crude climbed 1.2% to $68.28 a barrel in London trading by mid-afternoon, while West Texas Intermediate gained 1.3% to $64.81. With U.S. markets closed for Labor Day, volumes were thin, but traders remained alert to geopolitical risks and supply pressures.
Geopolitical Tensions Collide With Market Fundamentals
The rebound comes after both benchmarks suffered their first monthly declines in four months, shedding more than 6% in August as OPEC+ producers increased output.
Analysts said crude is now caught between expectations of a supply surplus in late 2025 and escalating military tensions in Eastern Europe.
“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,” Ole Hansen, head of commodity strategy at Saxo Bank, said.
Fresh data showed Russian crude shipments fell to a four-week low of 2.72 million barrels per day, adding to concerns over global flows. Ukrainian President Volodymyr Zelenskiy, meanwhile, pledged to ramp up strikes inside Russia after drone attacks knocked out power facilities in Ukraine’s north and south. The intensified campaign on both sides has heightened risks for Russian oil exports already under pressure from sanctions and shipping disruptions.
Beyond geopolitics, markets are bracing for U.S. jobs data this week, a key test for investor confidence in the Federal Reserve’s path toward rate cuts. A softer dollar, near a five-week low, helped crude climb Monday by making dollar-priced commodities cheaper for non-U.S. buyers.
HSBC analysts said oil inventories are likely to build in the final quarter of 2025 and into early 2026, forecasting a surplus of 1.6 million barrels per day. That prospect could keep a lid on prices even as near-term headlines are dominated by conflict-driven supply jitters.
