Brent was near $68 a barrel after rising almost 3% last week, while West Texas Intermediate was above $63. The US has threatened to double a tariff on all imports from India to 50% in retaliation for its purchases of Russian oil. With the penalty set to take effect on Wednesday, Indian diplomats have said local processors would continue taking crude from Moscow.
Risk assets including most commodities extended gains on Monday, with stocks rising after Fed Chair Jerome Powell flagged a potential resumption of rate cuts next month in a speech on Friday. Crude could benefit from the spur to economic activity, as well as a weakening of the US currency.
Global benchmark Brent has held in a narrow range for most of this month amid thin summer trading, as traders weighed challenges to Russian exports, efforts to end the conflict in Ukraine, and the drag from the US-led trade war. Futures remain about 9% lower this year on concern there will be a glut in the upcoming quarters after OPEC+ restarted a swath of idled production.
“Attention remains largely consumed by short-term events, and the potential downside risks in fundamentals have yet to be priced in,” said Gao Jian, a Shandong-based analyst at Qisheng Futures Co. The positive impact of any Fed rate cuts may “take some time to filter through,” he added.
The US redoubled efforts to broker an end to the war in Ukraine in recent weeks, with a series of high-profile diplomatic meetings. Last week, President Donald Trump appeared to swerve back to a tougher stance against Moscow, threatening Russia with “massive sanctions” unless a deal can be reached in about two weeks. Still, he also said Washington could “do nothing”.
Trading volumes in Brent futures were lower than the daily average in early Asian trading hours on Monday, with some traders off for a UK public holiday.