Ukraine executed a drone strike against Russia, resulting in a significant reduction in the operational capacity of a reactor at one of Russia’s largest nuclear power facilities.
Oil prices experienced a slight increase following Ukraine’s intensified assaults on Russia, raising fears that the supply of Russian oil might be interrupted. Concurrently, the anticipation of a reduction in U.S. interest rates supported a more optimistic outlook for global economic growth and fuel consumption.
Brent crude futures increased by 6 cents, or 0.09%, reaching $67.79 at 0050 GMT, while West Texas Intermediate (WTI) crude futures rose by 9 cents, or 0.14%, to $63.75.
According to Russian officials, Ukraine’s drone attack not only led to a significant decrease in the reactor’s capacity at one of Russia’s major nuclear power plants but also ignited a large fire at the Ust-Luga fuel export terminal.
Additionally, a fire at the Novoshakhtinsk refinery in Russia, triggered by a Ukrainian drone strike, continued to burn for the fourth consecutive day, as reported by the acting governor of the region.
This refinery primarily exports fuel and has an annual production capacity of 5 million metric tons of oil, equivalent to approximately 100,000 barrels per day.
“Considering the success Ukraine is achieving in targeting Russian oil infrastructure the risks associated with crude oil are increasingly leaning towards the upside,”.
In a separate development, U.S. Vice President JD Vance remarked that Russia has made “significant concessions” towards reaching a negotiated resolution in its conflict with Ukraine.
“They have acknowledged that they will not be able to establish a puppet government in Kyiv, which was a major demand initially. Importantly, they have recognized that there will be some security guarantees for Ukraine’s territorial integrity,” Vance commented.
Nevertheless, U.S. President Donald Trump reiterated that he would impose sanctions on Russia if there is no advancement towards a peaceful resolution in Ukraine within two weeks.
The risk appetite of investors has shown improvement following Federal Reserve Chair Jerome Powell’s indication of a potential interest rate reduction at the upcoming meeting of the U.S. central bank next month.
“A risk-on sentiment throughout the markets has enhanced investor interest in the commodities sector, supported by fresh supply-side challenges in the energy and metals markets,” stated analysts.
