Oil rises on Russia supply risks, Fed rate cut hopes

[oil pumps on sunset]
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Oil prices climbed Tuesday as traders weighed supply risks from Ukrainian drone strikes on Russian energy infrastructure alongside expectations for a U.S. rate cut. Brent (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) crude rose 0.9%, to $68.07 a barrel by 9:12 a.m. ET, while U.S. West Texas Intermediate (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) gained 1.2%, to $64.05. Both benchmarks also closed higher on Monday.

Russia’s pipeline operator Transneft has warned producers they may be forced to curb output after repeated Ukrainian attacks on ports and refineries. Analysts at J.P. Morgan said strikes on key export terminals such as Primorsk are designed to constrain Moscow’s ability to sell crude abroad and could inject more volatility into global oil markets. Goldman Sachs estimated [https://seekingalpha.com/news/4494873-goldman-sachs-sees-oil-prices-sliding-but-warns-of-potential-early-rebound] the attacks have sidelined roughly 300,000 barrels a day of Russian refining capacity since August.

Meanwhile, U.S. Treasury Secretary Scott Bessent signaled Washington won’t impose new tariffs on Chinese goods to discourage Russian crude purchases unless Europe takes similar action against Beijing and New Delhi, the two largest buyers of discounted Russian oil.

Markets are also watching the Federal Reserve’s Sept. 16-17 meeting, where policymakers are expected to cut interest rates. Lower borrowing costs could bolster fuel demand, though analysts remain wary about the health of the U.S. economy.

On the inventory front, U.S. crude stockpiles are projected to have fallen by 6.4 million barrels last week, reversing the prior week’s build. Official data is due Wednesday, with a Reuters poll showing expectations for declines in crude and gasoline inventories but a rise in distillates.

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