Oil prices climb as fed rate cut hopes boost demand outlook

August 25, 2025 (MLN): Oil prices edged higher on Monday as escalating Ukrainian attacks on Russian energy facilities heightened concerns about potential supply disruptions, while expectations of a U.S. interest rate cut lifted sentiment on global growth and fuel demand.

Brent crude futures increased by $0.21, or 0.31%, to $67.94 per barrel.

West Texas Intermediate (WTI) crude futures went up by $0.41, or 0.64%, to $64.07 per barrel by [3:08 pm] PST.

Ukraine launched fresh drone strikes over the weekend, forcing a sharp fall in capacity at one of Russia’s largest nuclear power plants and igniting a massive blaze at the Ust-Luga fuel export terminal, according to CNBC.

“Given the success that Ukraine is having with its targeting of Russian oil infrastructure the risks for crude oil are shifting to the topside,” said Tony Sycamore, market analyst at IG to CNBC.

Geopolitical tensions were further complicated by U.S. diplomacy. Vice President JD Vance said on Sunday that Russia had made “significant concessions” toward a negotiated settlement in the war, acknowledging that it cannot impose a puppet regime in Kyiv and accepting the need for security guarantees on Ukraine’s territorial integrity.

However, President Donald Trump renewed threats to impose sanctions on Russia if no progress is made toward peace within two weeks.

Beyond geopolitics, investor appetite was buoyed by Federal Reserve Chair Jerome Powell’s signal on Friday that the central bank could cut interest rates at its meeting next month.

Markets broadly welcomed the prospect of lower borrowing costs, which could stimulate economic activity and energy demand.

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