Oil prices witnessed a surge today, which was driven by rising geopolitical tensions in Europe and the Middle East. Therefore, the looming possibility of increased oil supply and worries about how trade tariffs might affect global fuel demand kept a lid on things.
In initial trading, Brent crude futures climbed 45 cents, or 0.67 percent, reaching $67.13 a barrel. Meanwhile, the US West Texas Intermediate crude contract for October was priced at $63.15 a barrel, up 47 cents, or 0.75 percent.
The expiration of the October WTI contract, with the more actively traded November contract rising 43 cents, or 0.69 percent, to $62.83 a barrel.
CEO of Investment Platform Moomoo Australia and New Zealand, Michael McCarthy, adds, “Reports over the weekend that Russia was threatening over the Polish border have provided traders with a timely reminder of the ongoing risks to European energy security from the north east.”
Armed forces of the NATO-member country reported, on early Saturday, Polish and allied aircraft were deployed to ensure the safety of Polish airspace after Russia launched airstrikes targeting western Ukraine near the border with Poland.
This deployment followed an incident on Friday when three Russian military jets breached NATO Estonia’s airspace for 12 minutes. Additionally, Germany’s air force reported yesterday that a Russian military plane entered neutral airspace over the Baltic Sea.
According to the Diplomats, today, the United Nations Security Council is set to convene in response to Estonia’s claim that Russian fighter jets violated its airspace.
Ukraine has launched drone attacks on Russia’s energy infrastructure, targeting terminals and refineries, in recent weeks. Meanwhile, US President Donald Trump has called on the European Union to stop purchasing Russian oil and gas.
Four Western nations have recognized a Palestinian state from the Middle East front, sparking a furious backlash from Israel and adding to the unease in this crucial oil-producing region.
On Friday, oil prices for Brent and WTI dipped over 1 percent, reflecting a slight drop for the week. Concerns about oversupply and waning demand have overshadowed hopes that the US Federal Reserve’s anticipated first interest-rate cut of the year would boost consumption.
On Sunday, Iraq’s state oil marketer, SOMO, said that the country has ramped up its oil exports as it gradually rolls back voluntary production cuts under the OPEC+ deal.
According to the Oil Ministry, in August, the oil exports of Iraq aggregated up to 3.38 million barrels per day. As per SOMO’s prediction, September’s exports will fall between 3.4 million and 3.45 million bpd.
Tim Evans, in his newsletter, Evans on Energy, states, “Rising inventories over the past six months have also confirmed that supply has been outpacing demand.”
He further adds, “Increased strategic reserves accumulated by China and the US have helped soak up the surplus, but the added inventories still reduce the near-term upside potential for prices and leave the downside open.”
