Oil prices surge amid rising tension in Europe, Middle East; brent crude at $67.07/barrel

Oil prices edged higher in Asian trading on Monday, supported by geopolitical tensions in Europe and the Middle East. However, expectations of increased supply and worries over the impact of trade tariffs on global fuel demand capped gains.

Brent crude futures climbed 34 cents, or 0.54 per cent, to $67.07 a barrel by 0317 GMT, while U.S. West Texas Intermediate (WTI) crude for October delivery rose 34 cents, or 0.54 per cent, to $63.02 a barrel.

The October WTI contract expires on Monday, with the more actively traded November contract up 36 cents, or 0.58 per cent, at $62.76 a barrel.

On Friday, Brent and WTI crude prices fell over 1 per cent, ending the week with a modest decline as concerns over abundant supply and weakening demand overshadowed optimism that the U.S. Federal Reserve’s first interest rate cut of the year might boost consumption.

What's behind the rally?

Poland’s armed forces were quoted as saying by Reuters on Saturday that Polish and allied aircraft were dispatched to secure the country’s airspace after Russia carried out airstrikes in western Ukraine, close to the Polish border.

The move followed a series of incidents: three Russian military jets breached NATO-member Estonia’s airspace for 12 minutes on Friday, and on Sunday, Germany’s air force reported that a Russian aircraft had entered neutral airspace over the Baltic Sea.

In recent weeks, Ukraine has intensified drone strikes on Russia’s energy facilities, targeting refineries and terminals, while U.S. President Donald Trump has called on the European Union to stop buying Russian oil and gas.

Meanwhile, in the Middle East, four Western countries officially recognized the Palestinian state, drawing a sharp backlash from Israel and heightening tensions in the vital oil-producing region.

(With inputs from Reuters)

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