Geopolitical jitters in Europe and Middle East buoy oil prices

Shafaq News

Oil prices gained in Asian trade on Monday
supported by geopolitical tension in Europe and the Middle East, although the
prospect of more oil supply and concern about the impact of trade tariffs on
global fuel demand weighed.

Brent crude futures rose 34 cents, or 0.54%,
to $67.07 a barrel by 0317 GMT while the U.S. West Texas Intermediate crude
contract for October was at $63.02 a barrel, up 34 cents, or 0.54%.

The October WTI contract expires on Monday
and the more active November contract gained 36 cents, or 0.58%, at $62.76 a
barrel.

“Reports over the weekend that Russia
was threatening over the Polish border has provided traders with a timely
reminder of the ongoing risks to European energy security from the north
east,” said Michael McCarthy, CEO of investment platform Moomoo Australia
and New Zealand.

Polish and allied aircraft were deployed
early on Saturday to ensure the safety of Polish airspace after Russia launched
airstrikes targeting western Ukraine near the border with Poland, armed forces
of the NATO-member country said.

The deployment came after three Russian
military jets violated NATO Estonia’s airspace for 12 minutes on Friday, while
on Sunday, Germany’s air force reported that a Russian military plane entered
neutral airspace over the Baltic Sea.

The United Nations Security Council is due to
meet on Monday over Estonia’s accusation that Russian fighter jets violated its
airspace, diplomats said.

In recent weeks, Ukraine stepped up drone
attacks on Russia’s energy infrastructure, hitting terminals and refineries,
while U.S. President Donald Trump has urged the European Union to halt Russian
oil and gas purchases.

In the Middle East news, four Western nations
recognised Palestinian state, prompting a furious response from Israel and
adding to jitters in the key oil-producing region.

Brent and WTI settled down more than 1% on
Friday to mark a slight decline last week as worries about large supplies and
declining demand outweighed expectations that the year’s first interest-rate
cut by the U.S. Federal Reserve would trigger more consumption.

Iraq has increased oil exports following the
gradual unwinding of voluntary production cuts under an OPEC+ agreement, the
country’s state oil marketer SOMO said on Sunday.

Iraq’s oil exports averaged 3.38 million
barrels per day in August, according to the oil ministry. SOMO expects
September’s average exports to range from 3.4 million to 3.45 million bpd.

“Rising inventories over the past six
months have also confirmed that supply has been outpacing demand,” Tim
Evans said in the newsletter Evans on Energy.

“Increased strategic reserves
accumulated by China and the U.S. have helped soak up the surplus, but the
added inventories still reduce the near-term upside potential for prices and
leave the downside open,” Evans said.

(Reuters)

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