WASHINGTON (dpa-AFX) - Crude oil has moved sharply higher on Tuesday amid the intensifying Russia-Ukraine war while investors turned their focus to the decision US Federal Reserve will make on interest rates tomorrow.
WTI Crude Oil for October delivery was last seen trading up by $1.22 (or 1.93%) at $64.52 per barrel.
On the geopolitical front, in an attempt to stall Russia's aggression, Ukraine has targeted Russia's energy assets since August. Ukrainian drones have hit at least 10 refineries so far.
According to a Reuters' report, Russian oil major Transneft has announced plans to cut output following Ukrainian attacks on ports and refineries.
Russia accounts for 9% of global oil production. With the threat of 'secondary sanctions' by the US and EU looming, this news has increased supply side concerns.
In the Middle East, standing in solidarity with Qatar, the gulf countries condemned the aerial attacks on Doha last week by Israeli Defense Forces. US Secretary of State Marco Rubio has asked Qatar to continue its mediatory role between Israel and Palestine.
Israel, however, reiterated its commitment to flush out Hamas militants and leaders 'wherever they are.'
Supply side concerns for crude oil remain due to the intensifying Russia-Ukraine war and this newly developed Middle East crisis.
A decision on interest rates will be announced tomorrow by the US Federal Reserve, with the crucial FOMC meeting underway. The announcement could alter the dollar price and thereby crude oil prices.
Aside from this, traders are looking forward to the crude inventory data from the US to be released on Wednesday at 10:30 am ET.
OPEC+ officials are reportedly planning to meet in Vienna this Thursday and Friday to discuss production capacities. The cartel has already agreed to raise production by 137,000 barrels per day beginning in October.
Notably, crude oil prices have declined by about 8% year-to-date.
The trade war triggered by US President Donald Trump is now directionless as the 'reciprocal tariffs' were decreed as 'illegal' by an appeals court on August 29.
This judgment is contested by the US administration in the US Supreme Court, which will begin hearing the case in November. With many economic majors signing pacts with the US on trade and a few other working on a framework, this development has brought the trade scene to a standstill.
Analysts feel that a slowdown in global economic growth would ease oil demand in the near-term. This, along with oversupply concerns due to OPEC cartel's decision can collectively weigh on oil prices.
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