Sep 12, 2025 (MarketLine via COMTEX) --
Crude oil prices increased slightly overall during the week due to supply risks arising from geopolitical instability around the world. The conflict in Ukraine escalated since the Trump-Putin summit in Alaska, and Russia initiated its largest drone attack over Ukraine this week. In response, Ukraine targeted RussiaaEUR(TM)s largest oil export terminal on the Baltic Sea besides several other installations associated with the energy sector. Moreover, as seen on few occasions earlier, some Russian drones traversed through Polish airspace, leading to tensions with Poland. Elsewhere, Israel struck Hamas leadership in Qatar, prompting tensions and backlash from countries around the world. Nevertheless, faltering economic growth in major economies, the US and China, eroded the gains in oil prices. Moreover, the OPEC+ pledged another crude oil output hike for October, which also contributed towards curbing the upside to oil prices. Additionally, the US commercial crude inventory grew for consecutive weeks, thereby pushing oil prices down during the week.
Some key factors that led to changes in crude oil prices this week are as follows:
Oil prices rose slightly on Monday and Tuesday, supported by the raging Russian-Ukraine conflict and its likely impact on energy assets in the region. Russia executed its biggest strike of this conflict over the weekend involving over 800 drones and around a dozen missiles that struck targets across Ukraine, including a government building in Kyiv. It prompted the US President to consider levying fresh sanctions on Russia to curb its revenue sources. As crude oil and natural gas exports are key sources of Russia’s income, this statement raised the risk of reduced crude availability in global markets and lifted prices further. Nevertheless, crude oil supply risks were somewhat mitigated after the OPEC+ announced that it would raise its collective output target for October 2025 by 137,000 barrels per day (bpd) over its current levels. The group had already raised its production volumes by 2.2 million bpd from April 2025 onwards, and the latest addition led to fears of an oversupply in global markets. Besides, sluggish exports from China also limited the upside to oil prices. As per the government data, exports from China in August 2025 rose at their slowest pace in the past six months 4.4% on an annual basis. Oil prices gained on Wednesday, supported by a spike in geopolitical tensions in the Middle East amid ongoing ceasefire negotiations in the Gaza conflict. After a terrorist attack in Jerusalem, Israel conducted precision strikes in Doha, Qatar, where senior leaders of the terror group Hamas had convened to discuss the latest ceasefire proposal. Tensions also rose in Europe after Poland shot down several Russian drones that had entered its airspace during strikes on Ukraine. It marked the first instance of a NATO member country engaging targets since the conflict started in February 2022. Against this backdrop European leaders met with US representatives to talk over a peace deal, and potentially new sanctions on Russia, giving further fillip to prices. However, the upside to prices was somewhat contained by a weekly crude and gasoline inventory build in the US. According to the EIA, the US crude stockpiles were up by 3.9 million barrels for the week ending on September 5, 2025. Gasoline inventory had also increased by 1.5 million barrels, despite the Labor Day long weekend. This led to concerns over fuel demand outlook for the remainder of the year following the end of the peak travel season in the country. Oil prices declined on Thursday, weighed down by worries over signs of surplus crude supply in global markets. In its monthly outlook report, the International Energy Agency (IEA), projected a global crude oil oversupply scenario for this year due to planned increases in the OPEC+ output. Prices also came under pressure from downward revision to annual jobs data for the US, indicating weakness in its economy. The US Bureau of Labor Statistics (BLS) released a preliminary report on various macroeconomic factors for the period April 2024-March 2025. In this report, the jobs data was slashed by 911,000 from the previous estimate following revisions to payrolls in the services sector. Oil prices rose slightly on Friday, supported by persistent risks to crude supplies from Russia amid the Ukraine conflict. Crude loadings from the Russian Baltic Sea port of Primorsk were briefly halted after a Ukrainian drone attack caused a fire incident. This terminal has a crude oil loading capacity of around 1 million barrels per day (bpd). In the overnight assault, Ukraine launched more than 200 drones at Russian energy assets, including the Novatek operated Ust-Luga oil terminal, Rosatom’s Smolensk nuclear power plant and other facilities, leading to equipment damages. However, the upside to prices was somewhat restrained by concerns over a rise in the US inflation due to high import tariffs. The US inflation for August 2025 stood at 2.9% year-on-year, 0.2% more than the previous month.
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COMTEX_468870259/2227/2025-09-18T18:06:24
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