Oil Prices Gain Ahead of Fed Meeting, As Ukraine Steps Up Attacks On Russian Refinery

Oil prices gained in early trading on Monday as Ukraine continued to hit Russian energy facilities, raising concerns over crude supply.

Benchmark Brent crude prices gained 0.5% to $66.17 per barrel, while U.S. West Texas Intermediate prices also advanced 0.5% to $62.99 per barrel at 3.44 a.m. ET. Retail sentiment on Stocktwits about the United States Oil Fund (USO) was in the ‘extremely bearish’ territory at the time of writing.

Over the weekend, Ukraine launched hundreds of drones at Russia, hitting the Kirishinefteorgsintez refinery, one of the two biggest refineries in the country, according to a Reuters News report.

The refinery processes 17.7 million metric tons per year, or 355,000 barrels per day, of Russian crude, which is equivalent to 6.4% of the country’s total output, the report added. While Ukraine claimed the attack was largely successful, the Russians did not disclose whether it had caused any damage to the facility.

The Ukrainian assault followed a strike at Russia’s largest oil exporting terminal, Primorsk, which ships over 1.1 million bpd of crude. Ukrainian President Volodymyr Zelenskyy reportedly said that the attack had caused ‘significant damage.’

This comes at a time when the U.S. is mulling a fresh round of sanctions on the buyers of Russian oil. On Sunday, Trump once again said he is willing to take stricter measures, only if European allies agree to match them and stop their purchases of Russian energy.

“As restrictions on the Russians have had a limited impact, tariffs on the buyers of the oil are a possibility, but as long as the barrels keep flowing, the balance in the wider market won’t be affected,” analyst Tim Evans said.

Investors will also be watching the outcome of this week’s meeting of the Federal Reserve policymakers, with the U.S. central bank widely expected to deliver a 25-basis-point cut to benchmark interest rates.

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