On Monday, oil prices remained stable as concerns about increasing production and the impact of U.S. tariffs on demand balanced out supply disruptions caused by intensified airstrikes in the Russia-Ukraine conflict. Brent crude dipped 12 cents to $67.36 a barrel, while U.S. West Texas Intermediate crude fell 13 cents to $63.88 a barrel. The muted trading was influenced by a U.S. bank holiday.
Ukrainian President Volodymyr Zelenskiy vowed to escalate strikes deep into Russia following drone attacks on Ukrainian power facilities, further intensifying the conflict. Despite these disruptions, markets were anxious about Russian oil exports, which dropped to a four-week low of 2.72 million barrels per day.
A Reuters poll indicated that oil prices are unlikely to rise significantly this year due to increased output from leading producers, which raises the risk of a supply surplus, compounded by U.S. tariff threats affecting demand growth. Additionally, China’s manufacturing activity shrank for the fifth consecutive month, reflecting uncertainty over a trade deal with the U.S. and weak domestic demand.
Investors are awaiting the upcoming OPEC+ meeting on September 7 for insights into production levels. Meanwhile, U.S. crude oil production reached a record high in June, climbing by 133,000 barrels per day to 13.58 million bpd. A labor market report this week is expected to provide further insights into the economy, potentially impacting investor sentiment toward commodities.