Oil prices rose in Asian trading on Monday, fueled by geopolitical tensions in Europe and the Middle East. However, expectations of greater oil supply and concerns about the impact of trade tariffs on global fuel demand are weighing on prices.
Brent crude futures rose 34 cents, or 0.54%, to $67.07 a barrel by 03:17 GMT, while the WTI October crude futures contract rose 34 cents, or 0.54%, to $63.02 a barrel.
The October WTI contract expires on Monday, and the more active November contract is trading 36 cents, or 0.58%, at $62.76 a barrel.
Reports over the weekend that Russia posed a threat on the Polish border warned investors about the ongoing risks to European energy security emanating from the northeast.
On Friday, three Russian military jets violated NATO-led Estonian airspace for 12 minutes. On Sunday, the German air force reported that a Russian military aircraft entered neutral airspace over the Baltic Sea.
Diplomats said the United Nations Security Council will meet on Monday following Estonia’s accusation that Russian warplanes violated its airspace.
In recent weeks, Ukraine has increased its drone strikes on Russia’s energy infrastructure, striking terminals and refineries. Trump has called on the European Union to halt purchases of Russian oil and gas.
In Middle East news, the recognition of the Palestinian state by four Western countries has sparked a harsh Israeli response, escalating tensions in the key oil-producing region.
Brent and WTI fell slightly last week, falling more than 1% on Friday. This decline came as concerns about large supplies and declining demand overshadowed expectations that the US Federal Reserve’s first interest rate cut of the year would spark greater consumption.
Iraq said it has increased its oil exports following the gradual withdrawal of voluntary production cuts under the OPEC+ agreement.
Increased inventories over the past six months also confirmed that supply exceeds demand. The expansion of strategic reserves by China and the US has helped address the oversupply, but the added inventories reduce the potential for price increases in the near term.