Oil Prices Rise Amid Escalating Russia-Ukraine Conflict, China Demand Concerns
By Florence Tan
SINGAPORE (Reuters) – Oil prices edged up on Monday after fighting between Russia and Ukraine intensified over the weekend, although concerns about fuel demand in China, the world’s second-largest consumer, and forecasts of a global oil surplus weighed on markets.
Crude oil futures gained as geopolitical tensions escalate, with Brent crude up 0.3% at $71.24 a barrel and U.S. West Texas Intermediate crude at $67.11 a barrel.
President Joe Biden’s decision allowing Ukraine to use U.S.-made weapons to strike deep into Russia has raised concerns about a major escalation in the conflict, impacting oil markets.
Russia’s largest air strike on Ukraine in months has caused significant damage to Ukraine’s power system, while Russian refineries face challenges due to export curbs and rising crude prices.
Weak data from China and projections of a global oil surplus have also contributed to a more than 3% slide in Brent and WTI prices last week.
China’s refinery throughput fell 4.6% in October, adding to worries about slowing factory output growth in the country.
Uncertainty surrounding interest rate cuts by the U.S. Federal Reserve and a decrease in the number of operating oil rigs in the U.S. have further fueled concerns in global financial markets.
Overall, the situation in Ukraine, China’s demand outlook, and global oil supply dynamics are key factors influencing oil prices and market sentiment.