(RTTNews) – Crude oil has moved modestly higher on Friday as concerns over supply side disruptions linger, with the Russia-Ukraine war intensifying and a new conflict brewing in the Middle East.
WTI Crude Oil for October delivery was last seen trading up by $0.31 (or 0.50%) at $62.68 per barrel.
As the Russia-Ukraine war enters day 1,296, both sides are relentlessly engaged in mutual airstrikes leading to significant fatalities.
A Ukrainian drone attack on Russia’s northwestern port of Primorsk (the country’s largest oil and fuel export terminal) led to the suspension of operations overnight.
After a failure in his attempts to broker a peace deal between Russia and Ukraine, US President Donald Trump has stated that the war is Europe’s problem more than a US problem.
Weeks before, to force Russia to come to the negotiating table, Trump imposed a 25% “penalty tariff” on India – a major purchaser of Russian oil – to cut Russia off from gaining billions of dollars through oil exports. However, Trump has now admitted to straining ties with one the US’ biggest trading partner.
With Russia rejecting talks with the Ukrainian president and expressing strong disapproval to Ukraine joining NATO, traders expect Trump may soon impose heavy sanctions on Russia.
In the Middle East, on September 9, Israeli Defense Forces targeted Hamas leaders sheltering in Doha, Qatar, escalating the regional conflict more as the Qatari PM has vowed “deadly revenge.”
With these geopolitical tensions, crude oil supply side concerns are rising.
A monthly report from the International Energy Agency on Thursday indicated that global oil demand would rise rapidly this year by 740,000 barrels per day, while a steeper supply side increase due to the planned output hike by OPEC+ member nations is projected.
Eight OPEC+ nations agreed on Sunday in a virtual meeting to raise production by 137,000 barrels per day beginning in October. Though the output is much lower than the monthly increases of about 555,000 bpd for September and August, and 411,000 bpd in July and June, it indicates that the cartel has begun to unwind a second tranche of cuts of about 1.65 million bpd, more than a year ahead of schedule.
Oil prices have fallen around 15% so far in 2025.
In the US, with the next monetary policy meeting of the Federal Reserve scheduled for September 16 and 17, next week, investors are heavily betting on an interest rate cut after this week’s inflationary readings.
Analysts feel that Fed’s decision next week shall be crucially impacting the US dollar value, and in turn, crude oil, as it is a dollar-denominated commodity.
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