By Seher Dareen
LONDON (Reuters) -Oil prices rose over 2% on Tuesday as expectations mounted that an escalation of the conflict between Russia and Ukraine would disrupt supply and the market speculated OPEC+ will not raise output at a meeting on Sunday.
Brent crude was up $1.13, or around 1.7%, at $69.28 a barrel by 1144 GMT, having risen just over 2% earlier.
U.S. West Texas Intermediate crude was at $65.79 a barrel, $1.78 or nearly 2.8% higher. WTI futures did not settle on Monday due to the Labor Day holiday in the United States.
“Brent futures are trending towards the upside ahead of the OPEC+ decision and geopolitical concerns over direction of Russia’s stake in the crude supply pool,” independent analyst Gaurav Sharma said.
Investors will monitor a meeting of eight members of the Organization of the Petroleum Exporting Countries and their allies on September 7.
Analysts said they believed the group would not unwind the remaining voluntary cuts in place from the eight members, including Saudi Arabia and Russia, which were supporting the market and keeping prices in the $60 a barrel range.
OPEC+ might wait for more data after the conclusion of the U.S. summer driving season before it makes its next move, Sharma added, given an expected supply surplus in the last quarter of the year.
Oil prices could fall for a fourth straight year, averaging $55 a barrel in the last quarter of this year, before OPEC+ steps in to stabilise the market into 2026 by cutting output, analysts at SEB commodities said in a note to clients.
Expectations that U.S. data will show another crude draw were also boosting the market, UBS analyst Giovanni Staunovo said.
The U.S. summer driving season officially finished with Monday’s Labor Day holiday, ending the highest demand period in the world’s largest fuel market.
On the supply side, Ukrainian drone attacks have shut down facilities accounting for at least 17% of Russia’s oil-processing capacity, or 1.1 million barrels per day, according to Reuters’ calculations.
The market will also focus on U.S. labour data due this week ahead of the Federal Reserve’s September meeting, which could strengthen the case for monetary easing after surprisingly weak U.S. payrolls data released in July.
(Reporting by Seher Dareen in London, Anjana Anil in Bengaluru and Colleen Howe in Beijing; Editing by Muralikumar Anantharaman, Sonali Paul, Alexandra Hudson, Emelia Sithole-Matarise and Barbara Lewis)
