Strong Chinese waterborne crude imports are also helping tighten oil markets, said UBS analyst Giovanni Staunovo
[BENGALURU] Oil prices settled more than US$1 a barrel higher on Monday (Dec 29) as Russia accused Ukraine of attacking President Vladimir Putin’s residence, while traders braced for potential supply disruptions in the Middle East due to rising tensions in Yemen.
Brent crude futures rose US$1.30, or 2.1 per cent, to settle at US$61.94 a barrel. US West Texas Intermediate crude gained US$1.34, or 2.4 per cent, to close at US$58.08.
Russia on Monday accused Ukraine of launching a drone attack on the Russian presidential residence in northern Russia, due to which Moscow now plans to review its position in peace talks. Ukraine dismissed Russian statements about the drone attack and its foreign minister said Moscow was seeking “false justifications” for further strikes against its neighbour.
“Unless Russia surprises the world by backing away from previous demands regarding territory and security guarantees, we are looking for the complex to edge higher through the rest of this week and next week,” oil trading advisory firm Ritterbusch and Associates said.
Prior to the drone attack claims, Ukrainian President Volodymyr Zelensky had said on Monday that significant progress had been made in talks with US President Donald Trump and agreed that US and Ukrainian teams would meet next week to finalise issues aimed at ending Russia’s war in Ukraine.
Tensions in Yemen raise supply concerns
The oil market’s focus has also shifted towards the Middle East, Gelber & Associates said in a note. “Fresh instability, including Saudi air strikes in Yemen, is keeping supply-disruption headlines in play,” the energy consultancy said.
Yemen’s Saudi-led coalition said any military moves by the main southern separatist group in the eastern province of Hadramout that undermined de-escalation efforts would be countered to protect civilians, the Saudi state news agency reported on Saturday.
An escalation of fighting on Thursday killed two people from the separatist group Southern Transitional Council’s Hadhrami Elite Forces in Hadramout, the group said in its statement. Saudi airstrikes followed early on Friday, targeting the STC forces in the area, a source told Reuters.
Strong Chinese waterborne crude imports are also helping tighten oil markets, said UBS analyst Giovanni Staunovo.
He added that US$60 a barrel was the soft floor for Brent, with prices expected to recover slightly in 2026 because non-Opec+ supply growth is likely to stall in the middle of 2026.
Energy investors awaited data on US stockpiles for the week ended Dec 19. The report, which was expected to be published at 10.30 am ET on Monday, was delayed without assigning a new publication time.
An extended Reuters poll showed US crude oil inventories were expected to have fallen in the week ended Dec 19, while distillate and petrol inventories were expected to have risen. REUTERS
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