Oil settles up over 2pc on dented peace hopes in Ukraine, tensions in Yemen

NEW YORK: Oil prices settled more than USD1 a barrel higher on Monday as Russia accused Ukraine of attacking President Vladimir Putin’s residence, while traders braced for potential supply disruptions in the Middle East due to rising tensions in Yemen.

Brent crude futures rose USD1.30, or 2.1 percent, to settle at USD61.94 a barrel. US West Texas Intermediate crude gained USD1.34, or 2.4 percent, to close at USD58.08.

Russia on Monday accused Ukraine of launching a drone attack on the Russian presidential residence in northern Russia, due to which Moscow now plans to review its position in peace talks. Ukraine dismissed Russian statements about the drone attack and its foreign minister said Moscow was seeking “false justifications” for further strikes against its neighbour.

“Unless Russia surprises the world by backing away from previous demands regarding territory and security guarantees, we are looking for the complex to edge higher through the rest of this week and next week,” oil trading advisory firm Ritterbusch and Associates said.

Prior to the drone attack claims, Ukrainian President Volodymyr Zelenskiy had said on Monday that significant progress had been made in talks with US President Donald Trump and agreed that US and Ukrainian teams would meet next week to finalize issues aimed at ending Russia’s war in Ukraine.

Tensions in Yemen raise supply concerns

The oil market’s focus has also shifted toward the Middle East, Gelber & Associates said in a note. “Fresh instability, including Saudi air strikes in Yemen, is keeping supply-disruption headlines in play,” the energy consultancy said.