Oil trades in tight range amid Russia-Ukraine strikes, demand concerns

SINGAPORE: Oil kicked off the week stuck in a tug-of-war between geopolitics, production fights, and the looming shadow of US tariffs. Prices slipped only slightly on Monday, but the mood was more about nervous waiting than any real momentum.

Brent crude edged down 12 cents to $67.36 a barrel, while US West Texas Intermediate slid 13 cents to $63.88. Trading stayed quiet thanks to a US bank holiday, though the calm felt more like a pause before the next storm.

War in Ukraine keeps oil flows shaky

The war in Ukraine remains the wild card. After another weekend of Russian drone strikes on power plants, Ukrainian President Volodymyr Zelenskiy promised to hit back with deeper attacks inside Russia. That tit-for-tat has already been rattling energy infrastructure and slowing Russian exports. Tanker tracker data showed shipments from Russian ports slumped to a four-week low of 2.72 million barrels per day.

Analysts say those drops keep markets on edge, but traders are not betting on big price jumps yet. A Reuters poll last week suggested oil prices may not climb much this year, with fresh output from top producers threatening to flood the market just as tariffs from Washington put a lid on demand.

China slowdown and OPEC+ meeting in focus

Adding to the jitters, China’s factories shrank for a fifth straight month in August. The official survey released Sunday pointed to weak domestic demand and trade uncertainty with the US, both of which sap energy use.

Investors are now watching the September 7 OPEC+ meeting closely. Any hint that the alliance is ready to pump more could tilt prices lower. Meanwhile, US crude output is already at a record. Government data showed production in June rose by 133,000 barrels per day to 13.58 million.

The week ahead

Beyond oil, markets are bracing for a US labour report later this week. A strong jobs number could shake up expectations for interest rate cuts, which have been fuelling risk appetite across commodities.

For now, oil prices sit in limbo, waiting for the next headline to decide which way they break.