Oil prices rose slightly on Monday following an escalation in fighting between Russia and Ukraine over the weekend. However, gains were limited by concerns over weak fuel demand in China, the world’s second-largest oil consumer, and projections of a global oil surplus, reports Reuters.
Brent crude futures gained 20 cents, or 0.3%, to $71.24 a barrel by 0130 GMT, while U.S. West Texas Intermediate crude futures were at $67.11 a barrel, up 9 cents, or 0.1%.
In a significant reversal of Washington's policy in the Ukraine-Russia conflict, President Joe Biden's administration has allowed Ukraine to use U.S.-made weapons to strike deep into Russia, two U.S. officials and a source familiar with the decision said on Sunday.
There was no immediate response from the Kremlin, which has warned that it would see a move to loosen the limits on Ukraine's use of U.S. weapons as a major escalation.
"Biden allowing Ukraine to strike Russian forces around Kursk with long-range missiles might see a geopolitical bid come back into oil as it is an escalation of tensions there, in response to North Korean troops entering the fray," IG markets analyst Tony Sycamore said.
Russia unleashed its largest air strike on Ukraine in almost three months on Sunday, causing severe damage to Ukraine's power system.
China's refinery throughput fell 4.6% in October from last year and as the country's factory output growth slowed last month, government data showed on Friday.
Investors also fretted over the pace and extent of interest rate cuts by the U.S. Federal Reserve that has created uncertainty in global financial markets.
The number of active oil rigs in the U.S. dropped by one to 478 last week, reaching its lowest level since the week of July 19, according to Baker Hughes data.
Bd-pratidin English/ Jisan
