Oil prices traded lower on Monday as concerns about rising supply and the impact of U.S. tariffs on global demand overshadowed supply disruptions linked to intensified Russia-Ukraine airstrikes.
Brent crude oil, against which Nigerian crude oil is priced, declined by 30 cents or 0.44 percent to $67.18 a barrel at 06:00 a.m. in Nigeria, while U.S. West Texas Intermediate crude slipped 28 cents or 0.44 percent to $63.73 a barrel.
The market continued to assess geopolitical risks after Ukrainian President Volodymyr Zelenskiy vowed further retaliatory strikes inside Russia following drone attacks on Ukrainian energy facilities.
Russian oil exports have been disrupted, with weekly shipments falling to a four-week low of 2.72 million barrels per day, according to tanker tracker data cited by ANZ analysts.
Despite reduced flows, traders reported that Russian crude exports to India are set to rise in September. This comes despite secondary U.S. tariffs imposed on New Delhi for continuing to purchase Russian oil.
Market participants are closely monitoring the upcoming meeting between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin at the Shanghai Cooperation Organisation summit in China.
Meanwhile, global demand concerns remain heightened. A Reuters poll last week indicated oil prices are unlikely to sustain gains this year as higher production from top suppliers risks pushing the market into surplus.
U.S. crude production reached a record 13.58 million barrels per day in June, an increase of 133,000 bpd from May, according to the Energy Information Administration.
In Asia, factory activity data showed mixed signals. China posted an unexpected expansion in August, but Japan and South Korea recorded weaker performance as companies faced the effects of U.S. tariffs.
The slowdown clouded the region’s recovery outlook, with Asia representing some of the largest importers of crude oil.
Both Brent and WTI recorded their first monthly decline in four months in August, losing more than 6 percent amid OPEC+ supply concerns and fragile demand.
Investors are now awaiting the September 7 OPEC+ meeting for further guidance on supply management, while a U.S. labor market report later this week is expected to provide signals on economic conditions and reinforce expectations of Federal Reserve policy easing.