Crude oil rises as Russia-Ukraine war, risk of tougher sanctions hang over market

[Data analyzing in commodities energy market: the charts and quotes on display. US WTI crude oil price analysis. Stunning price drop for the last 20 years.]
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Crude oil futures started the week with solid gains as expectations fade for a Russia-Ukraine peace and rise that the U.S. will increase sanctions, while tight diesel supplies continue to support prices.

Ukraine has been stepping up attacks on Russian energy infrastructure, launching a drone attack Sunday that reportedly caused a huge fire at Russia's Baltic export terminal at Ust-Luga, and a fire at Russia's Novoshakhtinsk refinery burned for a fourth day Sunday, also following a Ukrainian drone attack; Ukraine has attacked eight Russian refineries so far this month.

"The geopolitical backdrop once again emerged as the primary catalyst for energy markets," Antonio Di Giacomo of XS.com said in a note, as the possibility of U.S. sanctions, including tariffs on India for buying Russian oil, and stepped up Ukrainian strikes on Russian oil infrastructure, "raise concerns about the stability of global supply, even though supply and demand fundamentals suggest a relatively loose market heading into the fall."

Also lifting crude futures was Federal Reserve Chair Powell's Friday speech signaling a potential interest rate cut as soon as the central bank's September policy meeting, which could help boost the U.S. economy and demand for oil and oil products.

WTI's jump above its 100-day moving average of $64.45/bbl also prompted some buying from algorithmic-based traders, Bloomberg reported.

Front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for October delivery closed +1.8% to $64.80/bbl, and front-month Brent crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) for October ended +1.6% to $68.80/bbl, the fourth straight daily gain for both benchmarks.

U.S. natural gas finished little changed, with Nymex natural gas (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) for September delivery -0.1% to $2.696/MMBtu ahead of its Wednesday expiry, while October gas closed +0.3% to $2.807/MMBtu.

ETFs: (NYSEARCA:USO [https://seekingalpha.com/symbol/USO]), (BNO [https://seekingalpha.com/symbol/BNO]), (NYSEARCA:UCO [https://seekingalpha.com/symbol/UCO]), (SCO [https://seekingalpha.com/symbol/SCO]), (USL [https://seekingalpha.com/symbol/USL]), (DBO [https://seekingalpha.com/symbol/DBO]), (DRIP [https://seekingalpha.com/symbol/DRIP]), (GUSH [https://seekingalpha.com/symbol/GUSH]), (USOI [https://seekingalpha.com/symbol/USOI]), (UNG [https://seekingalpha.com/symbol/UNG]), (BOIL [https://seekingalpha.com/symbol/BOIL]), (KOLD [https://seekingalpha.com/symbol/KOLD]), (UNL [https://seekingalpha.com/symbol/UNL]), (FCG [https://seekingalpha.com/symbol/FCG]), (NYSEARCA:XLE [https://seekingalpha.com/symbol/XLE])

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