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Oil Rises on Weaker Dollar and Russian Supply Disruptions

A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer/File Photo
A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer/File Photo
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Oil Rises on Weaker Dollar and Russian Supply Disruptions

A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer/File Photo
A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer/File Photo

Oil prices rose by more than 1% on Monday on concern over supply disruptions stemming from intensified Russia-Ukraine airstrikes as well as a weaker dollar.

Brent crude was up 83 cents, or 1.2%, at $68.31 a barrel by 1215 GMT. US West Texas Intermediate crude also rose 83 cents, or 1.3%, to $64.84. Trading is expected to be muted because of a US public holiday.

Brent and WTI crude registered their first monthly declines in four months in August, losing 6% or more on increased supply from the OPEC+ producer group, Reuters reported.

"Crude fell in August and has started September with no clear direction within established ranges as fears of a fourth-quarter supply glut are offset by geopolitical tensions," said Ole Hansen, head of commodity strategy at Saxo Bank.

Investors were focused on Beijing, where Chinese President Xi Jinping, Russian counterpart Vladimir Putin and Indian Prime Minister Narendra Modi are attending a regional summit. Also on the radar was OPEC+ meeting on September 7, Hansen added.

Markets remain concerned about Russian oil flows, with weekly shipments from its ports dropping to a four-week low of 2.72 million barrels per day (bpd), according to tanker tracker data cited by ANZ analysts.

Ukrainian President Volodymyr Zelenskiy vowed on Sunday to retaliate with more strikes deep inside Russia after Russian drone attacks on power facilities in northern and southern Ukraine. Both countries have intensified airstrikes in recent weeks, targeting energy infrastructure and disrupting Russian oil exports.

A Reuters poll on Friday showed that oil prices are unlikely to gain much from current levels this year, as rising output from top producers adds to the risk of a surplus and US tariff threats weigh on demand growth.

Coming out of the summer season, oil inventories should rise in the last quarter of 2025 and the first quarter of 2026, HSBC analysts said in a note, with a surplus of 1.6 million barrels per day in the fourth quarter.

Elsewhere, the US labor market report this week will give a read on the economy's health and test investor confidence that interest rate cuts are coming soon, a view that has strengthened appetite for riskier assets such as commodities.

Ahead of the data, the dollar was close to a five-week low on Monday, making oil less expensive for buyers using other currencies.

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China’s Fossil-Fueled Power Output Falls 4.3% in August as Clean Energy Gains

This picture shows the construction site of the CNNC Tianwan Tidal Flat Photovoltaic Demonstration Project in Lianyungang, in eastern China's Jiangsu province on September 15, 2026. (CN-STR / AFP)
This picture shows the construction site of the CNNC Tianwan Tidal Flat Photovoltaic Demonstration Project in Lianyungang, in eastern China's Jiangsu province on September 15, 2026. (CN-STR / AFP)
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China’s Fossil-Fueled Power Output Falls 4.3% in August as Clean Energy Gains

This picture shows the construction site of the CNNC Tianwan Tidal Flat Photovoltaic Demonstration Project in Lianyungang, in eastern China's Jiangsu province on September 15, 2026. (CN-STR / AFP)
This picture shows the construction site of the CNNC Tianwan Tidal Flat Photovoltaic Demonstration Project in Lianyungang, in eastern China's Jiangsu province on September 15, 2026. (CN-STR / AFP)

China's fossil-fueled power generation fell 4.3% in August from a year earlier, figures from the National Bureau of Statistics showed on Tuesday, as rising hydropower, nuclear and renewable output cut into coal's share.

It was the second month in a row of declines for China's fossil-fueled or thermal power generation, which is mostly from coal with a small amount from natural gas.

"Power generation from coal and gas fell 4% in China in August, as solar and wind ‌covered all electricity ‌demand growth and hydropower and nuclear grew ‌as ⁠well," the Centre ⁠for Research on Energy and Clean Air co-founder Lauri Myllyvirta wrote in a LinkedIn post, adding that "wind power generation rebounded from the slump of the earlier months of the year."

Thermal electricity generation still rose 0.9% over the first eight months as a whole, dragged down by the earlier months ⁠of the year because of poor ‌wind speeds and maintenance at nuclear ‌units.

Hydropower volumes rose 2.8% in August and 7.8% over ‌the first eight months.

Nuclear power generation rose 9.4% ‌from a year earlier. Two new nuclear reactors, the Guangdong Taipingling nuclear power plant and unit 3 of the Changjiang nuclear power plant, started operations in August, according to state media. Over the first ‌eight months, it rose 1.6%.

China generated 943.8 billion kilowatt-hours (kWh) of power in August, down ⁠0.8% ⁠compared with the same period of last year, the statistics bureau figures also showed. However, the data reflects output from industrial enterprises with revenue above 20 million yuan ($2.98 million), so excludes some small-scale renewables and generally undercounts total power generation as well as wind and solar.

The data showed that solar and wind generation rose 10.3% and 7.9%, respectively, from a year earlier.

Over the first eight months as a whole, power generation reached 6.65 trillion kWh, up 2.4% compared with the same period of last year, the data showed.

Business

Morgan Stanley Turns More Hawkish, Forecasts Two Fed Hikes and ECB Move

The Federal Reserve Board building in Washington, DC, US, November 14, 2025. (Reuters)
The Federal Reserve Board building in Washington, DC, US, November 14, 2025. (Reuters)
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Morgan Stanley Turns More Hawkish, Forecasts Two Fed Hikes and ECB Move

The Federal Reserve Board building in Washington, DC, US, November 14, 2025. (Reuters)
The Federal Reserve Board building in Washington, DC, US, November 14, 2025. (Reuters)

Morgan Stanley has joined other major Wall Street banks in adopting a more hawkish outlook on interest rates, forecasting US Federal Reserve rate hikes and another European Central Bank increase later this year as inflationary pressures persist.

The forecasts come ahead of policy decisions from the US Fed and the Bank of Japan this week, days after the ‌ECB resumed its tightening ‌cycle, keeping global markets focused on ‌the outlook ⁠for interest rates.

Morgan ⁠Stanley expects the Fed to raise interest rates by 25 basis points at its September 15-16 meeting and deliver another quarter-point increase in December after recent inflation readings came in above expectations.

In a note on Monday, the brokerage said the disinflation process has been "slower and less convincing" than policymakers are likely to require, prompting it ⁠to forecast two rate hikes this year.

It also expects ‌the US central bank to ‌signal further tightening before officials pause as inflation moderates.

"We see arguments for ‌both a hike and a hold, but signs of second-round ‌effects from energy prices, strong demand tied to AI-related investment, a neutral rate that is possibly temporarily higher, and concerns about credibility mean the balance of risks now argues for a somewhat more restrictive policy," the brokerage ‌added.

Kevin Warsh, who took over as Fed chair in May, has repeatedly avoided offering guidance on ⁠the likely ⁠path of US interest rates.

But with inflation running above target, oil prices trading above $100 a barrel and financial markets overwhelmingly pricing in a rate increase, investors see this week's meeting as likely to deliver the first rate hike of his tenure.

In Europe, Morgan Stanley revised its ECB outlook to forecast an additional 25-basis-point increase in December, lifting the deposit rate to 2.75%, reversing its previous expectation that the central bank's tightening cycle had ended.

The brokerage cited resilient euro zone growth and higher energy prices in forecasting another ECB rate hike in December, and now expects just one rate cut in 2027, in December.

Business

Gold Slips as Oil Gains Strengthen Case for Elevated Interest Rates

04 April 2025, Bavaria, Munich: Gold bars of various sizes lie in a safe on a table at the precious metal dealer Pro Aurum. (dpa)
04 April 2025, Bavaria, Munich: Gold bars of various sizes lie in a safe on a table at the precious metal dealer Pro Aurum. (dpa)
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Gold Slips as Oil Gains Strengthen Case for Elevated Interest Rates

04 April 2025, Bavaria, Munich: Gold bars of various sizes lie in a safe on a table at the precious metal dealer Pro Aurum. (dpa)
04 April 2025, Bavaria, Munich: Gold bars of various sizes lie in a safe on a table at the precious metal dealer Pro Aurum. (dpa)

Gold slipped on Tuesday as rising crude oil prices heightened inflation worries and reinforced US rate-hike expectations ahead of a Federal Reserve policy meeting.

Spot gold was down 0.2% at $4,287.69 per ounce, as of 0713 GMT, after hitting its lowest point since August 7 on Monday. US gold futures fell 0.5% to $4,328.10.

The US ‌central bank will ‌announce its policy decision at 1800 GMT ‌on ⁠Wednesday following the ⁠end of a two-day meeting. Financial markets are betting heavily that Fed policymakers will lift their benchmark rate a quarter of a percentage point to a 3.75%-4.00% range.

"How Fed Chair Kevin Warsh frames that hike will matter more than the hike itself for gold... If he casts ⁠it as the start of a meeting-by-meeting tightening ‌cycle, that would be a ‌hit to gold and to risk assets overall," IG market ‌analyst Tony Sycamore said.

"If instead he signals a preference for ‌a more measured pace, that would prove somewhat supportive for risk sentiment and for gold."

Though seen as a hedge against inflation and geopolitical risks, gold often loses appeal when rates rise ‌as they increase the opportunity cost of holding non-yielding bullion.

Data on Friday showed US consumer ⁠prices accelerated ⁠in August, while a key measure of underlying inflation posted its largest increase in four months.

On the geopolitical front, Yemen's Iran-aligned Houthis launched a fresh wave of attacks on Saudi Arabia and were digging into positions on the western coast of Yemen along the Red Sea.

Oil prices rose as concerns over supply disruptions lingered. Higher energy costs can fuel inflationary pressures across the economy.

Meanwhile, bonds slumped, sending benchmark 10-year US Treasury yields to their highest since 2007.

Spot silver fell 0.4% to $62.98, platinum gained 0.1% to $1,761.12 and palladium fell 0.8% to $1,282.79.