Oil prices rose slightly on Monday after fighting between Russia and Ukraine intensified over the weekend, although concerns about fuel demand in China, the world's second-largest consumer, and forecasts of a global oil surplus weighed on the markets.
Brent oil futures gained 20 cents, or 0.3 percent, to $71.24 a barrel by 0130 GMT, while West Texas Intermediate oil futures were at $67.11 a barrel , up 9 cents, or 0.1%.
In a significant reversal of Washington's policy in the Ukraine-Russia conflict, President Joe Biden's administration has authorized Ukraine to use U.S.-made weapons to strike deeply at Russia, two U.S. officials and a source familiar with the decision.
The Kremlin did not immediately respond, but warned that it would consider any move to relax limits on Ukraine's use of U.S. weapons a major escalation.
“Biden authorizing Ukraine to strike Russian forces around Kursk with long-range missiles could see a geopolitical bid back on oil, as it is an escalation of tensions in that country, in response to the entry of North Korean troops,” said Tony Sycamore, market analyst at IG.
On Sunday, Russia launched its largest air attack on Ukraine in almost three months, causing serious damage to Ukraine's power grid.
In Russia, at least three refineries have had to halt processing or reduce production due to heavy losses from export restrictions, rising crude prices and high borrowing costs, according to five industry sources.
Brent and WTI fell more than 3% last week on weak Chinese data and after the International Energy Agency forecast that global oil supply would exceed demand by more than one million barrels per day in 2025, even if OPEC+ maintains its reductions.
China's refinery throughput fell 4.6% in October from a year ago and the country's industrial output growth slowed last month, according to government data released Friday.
Investors have also been concerned about the pace and scale of interest rate cuts by the U.S. Federal Reserve, which has created uncertainty in global financial markets.
In the United States, the number of operating oil rigs fell by one to 478 last week, the lowest level since the week of July 19, according to data from Baker Hughes.
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