Oil & Gas

Brent crude rose 0.54% to $68.52 a barrel, while U.S. West Texas Intermediate gained 1.58% to $65.02. Analysts say the uptick is being driven partly by expectations that upcoming U.S. jobs data could strengthen the case for Fed rate cuts, reviving energy demand. On the supply side, Ukrainian drone strikes have disrupted up to 17% of Russia’s oil-processing capacity equivalent to about 1.1 million barrels per day amplifying concerns of prolonged instability in global flows. Market participants are now watching the OPEC+ meeting scheduled for September 7, with expectations the group will hold output steady after recent unwinding of production cuts.

The balance of supply and demand remains fragile. The International Energy Agency warns that global supply has outpaced demand in recent months, pointing to a possible surplus that could weigh on prices. ING analysts highlight that the greater risk lies in OPEC+ reinstating cuts to stabilize the market, especially if tariffs and slowing global growth dampen energy consumption. Traders are therefore navigating an uncertain economic backdrop, with oil supported in the short term by rate cut expectations but challenged in the medium term by oversupply risks.

Geopolitical tensions continue to complicate the energy landscape. Ukraine has vowed to intensify strikes deep into Russian territory, targeting energy infrastructure that underpins Moscow’s export revenues. Russia, in turn, has escalated attacks on Ukraine’s transport and energy systems. Adding to the complexity, Chinese President Xi Jinping has pressed for a “new global order” prioritizing the Global South, a stance that aligns with Russia and India both among the largest buyers of Russian crude. Meanwhile, the U.S. has imposed additional tariffs on India over Russian oil purchases but has refrained from similar measures on China, underscoring Washington’s selective geopolitical pressure.