Oil prices advanced modestly in Asian trading on Monday after Ukraine intensified drone strikes on Russian energy assets, sparking concerns over potential supply disruptions.
Market sentiment was further buoyed by expectations that the Federal Reserve may cut interest rates next month, supporting the outlook for global fuel demand.
By 2:55 pm AEST (4:55 am GMT), Brent crude futures were up 6 cents, or 0.1%, at $67.79 a barrel, while West Texas Intermediate (WTI) futures rose 8 cents, or 0.1%, to $63.74.
Russian officials confirmed that a Ukrainian drone strike on Sunday reduced the capacity of a reactor at one of Russia’s largest nuclear power plants and ignited a major fire at the Ust-Luga fuel export terminal.
In a separate attack, a blaze continued for a fourth day at the Novoshakhtinsk refinery, the acting governor of the region said. The refinery, with an annual capacity of 5 million metric tonnes of oil — about 100,000 barrels per day — mainly produces fuel for export.
On the diplomatic front, United States Vice President JD Vance said Russia had made “significant concessions” in negotiations over the conflict.
“They've recognized that they're not going to be able to install a puppet regime in Kyiv. That was, of course, a major demand at the beginning. And importantly, they've acknowledged that there is going to be some security guarantee to the territorial integrity of Ukraine," Vance said on NBC's Meet the Press with Kristen Welker.
At the same time, U.S. President Donald Trump warned that sanctions on Russia would be imposed within two weeks if there was no progress toward a peace settlement.
Investor sentiment was also supported after Federal Reserve Chair Jerome Powell signalled on Friday that a potential interest rate cut could be on the table at the central bank’s upcoming meeting.
