Oil prices surge amid intensified Russia-Ukraine conflict

Oil prices saw a slight increase on Monday, driven by escalating fighting between Russia and Ukraine over the weekend. However, concerns about weakening fuel demand in China and forecasts of a global oil surplus kept market gains in check.

Brent crude futures gained 29 cents, or 0.4%, to $71.33 a barrel by 0502 GMT, while U.S. West Texas Intermediate crude futures were at $67.20 a barrel, up 18 cents, or 0.3%, News.Az reports, citing Reuters.

Russia unleashed its largest air strike on Ukraine in almost three months on Sunday, causing severe damage to Ukraine's power system.

In a significant reversal of Washington's policy in the Ukraine-Russia conflict, President Joe Biden's administration has allowed Ukraine to use U.S.-made weapons to strike deep into Russia, two U.S. officials and a source familiar with the decision said on Sunday.

There was no immediate response from the Kremlin, which has warned that it would see a move to loosen the limits on Ukraine's use of U.S. weapons as a major escalation.

Brent and WTI slid more than 3% last week on weak data from China and after the International Energy Agency forecasted that global oil supply will exceed demand by more than 1 million barrels per day in 2025 even if cuts remain in place from OPEC+.

China's refinery throughput fell 4.6% in October from last year and as the country's factory output growth slowed last month, government data showed on Friday.

Investors also fretted over the pace and extent of interest rate cuts by the U.S. Federal Reserve that has created uncertainty in global financial markets.

In the U.S., the number of operating oil rigs fell by one to 478 last week, the lowest since the week to July 19, Baker Hughes data showed.

News.Az